Despite hosting more travelers last year than the year before, New Orleans lost ground with an increasingly key demographic: millennials.
The city hosted nearly 9.9 million visitors in 2015, but the largest block — 36 percent — were ages 50 to 64. Next up: Visitors ages 35 to 49, making up about 30 percent.
The smallest group? Those ages 25 to 34 made up about 15 percent of the city’s visitors — its lowest point in five years, according to a recent University of New Orleans report.
New Orleans’ recent vogue as a tourist destination helped push hotel room rates up to $148 in 2015, a trend that’s expected to continue this year. Though that’s welcome news for the local hospitality industry, some industry observers say rising rates may sideline younger, budget-conscious millennial travelers, a majority of whom earn less than $50,000 a year.
“When you compare that to the household income of the other brackets that we study, it’s quite low,” said John Williams, dean of UNO’s College of Business Administration. “They are definitely looking for mid-scale properties and economy properties that will offer them a better rate.”
Nearly two dozen hotels are in various stages of construction downtown, a wave of projects that’s expected to ease pent-up demand. Several target the millennial market by using appealing designs and limited frills — think smaller rooms and less furniture — to keep rates low.
“Developers can get a better yield with smaller-sized rooms, obviously, and the millennials are really not in their rooms a whole lot, especially if they come to this city,” said Lenny Wormser, senior managing director of Latter & Blum’s hospitality division.
Other distinctions can include hardwood floors instead of carpet, ample plug-in space for charging portable electronics and offering better sit-down and to-go food and beverage options. The hotels often emphasize lively and interactive common spaces and tech-savvy features like Internet-streaming TVs and mobile check-ins.
The new features give the facilities a wider appeal beyond younger travelers, experts say, making it a trend hoteliers are likely to continue.
“It’s just the direction (the industry is headed) because that’s the generation that’s coming,” said Mark Coltharp, vice president of operations for Wright Investment, the company managing the recently-opened Moxy Hotel, a Marriott International hotel at 210 O’Keefe Ave. “They’re already here, and the numbers are huge, so our industry is working hard to tap into that.”
Anticipating that younger travelers want to spend more time exploring the city than in the hotel, the Moxy’s 108 rooms are smaller than the typical Marriott property. Closets are traded for pegs to hang clothing. Bathrooms have showers instead of bathtubs. All around, there’s less furniture.
On the other hand, the hotel offers new-age amenities like mobile check-in and check-out; keyless entry; motion-sensor lighting; and TVs that can stream online services like Netflix and Hulu. Guests also have the option to grab a few beers or quick to-go bite with the hotel’s self-serve bar.
“It’s all very well thought out, and it really comes together well, but it’s a totally different room style,” Coltharp said. He declined to say how much the hotel conversion cost.
Last week, the Moxy — billed as a “boutique-hotel concept for the fun-hunting traveler” — offered weeknight availability in June as low as $107. Fridays and Saturdays were open for $180, and Sundays were as low as $147.
“We’re going to be moderately-priced and affordable,” Coltharp said. “That’s part of the concept that it’s a great, fun stay and it’s affordable.”
The Ace Hotel New Orleans, an Art Deco-inspired property that opened in March at 600 Carondelet St., also is geared toward younger, selective travelers. Rooms, which start at $189 weekdays and $269 weekends, include a turntable and full-sized refrigerator stocked with fresh ingredients for mixing cocktails.
Elsewhere across the city, the 14-story Oil and Gas Building, a long-vacant Central Business District skyscraper, is being converted into a Canopy by Hilton hotel, designed to have an urban neighborhood vibe.
In Bywater, a 185-bed hostel and boutique hotel geared toward millennials is planned for a stretch of vacant land along the Mississippi River. The $16 million project includes a mix of lower-cost shared hostel-style rooms and more expensive private rooms, as well as a restaurant, coffee shop, laundromat, bar and pool.
And a second Moxy Hotel is expected to be built in the CBD in the 700 block of St. Charles Avenue.
As new hotels open, Williams said, they will offer cash-strapped millennial travelers more options. Many that visited the city last year avoided the expensive peak seasons, he said, instead saving money by planning a trip midweek or the summer.
“They have it on their bucket list, and it doesn’t matter how hot or humid it is, they just want to be here,” he said.
Follow Richard Thompson on Twitter, @rthompsonMSY.