A streetcar passes in front of the Hotel Perle at the corner of St. Charles Ave. and Julia St. in New Orleans, Monday, Nov. 18, 2024.
A worker fixes the sidewalk in front of the Hotel Perle at the corner of St. Charles Ave. and Julia St. in New Orleans, Monday, Nov. 18, 2024.
The living space in the four bedroom suite at the Hotel Perle at the corner of St. Charles Ave. and Julia St. in New Orleans, Monday, Nov. 18, 2024.
A hallway at the Hotel Perle at the corner of St. Charles Ave. and Julia St. in New Orleans, Monday, Nov. 18, 2024.
A view of the swimming pool at the Hotel Perle at the corner of St. Charles Ave. and Julia St. in New Orleans, Monday, Nov. 18, 2024.
A catwalk with glass block as a window at the Hotel Perle at the corner of St. Charles Ave. and Julia St. in New Orleans, Monday, Nov. 18, 2024.
Chloe Cosgrove, Michael Bucher and Jack “Buck” Buczkowski at the Hotel Perle at the corner of St. Charles Ave. and Julia St. in New Orleans, Monday, Nov. 18, 2024.
The living space in the four bedroom suite at the Hotel Perle at the corner of St. Charles Ave. and Julia St. in New Orleans, Monday, Nov. 18, 2024.
From left to right, Duff Friend, Hammy Halum, and Damin Halum, stand on a communal rooftop area as they look at a trellis system they plan to have installed at The Mayfair hotel on Canal Street in downtown New Orleans on Friday, August 16, 2024. (Photo by Chris Granger, The Times-Picayune)
The Mayfair hotel, far left, being built next door to The Ruby Slipper on Canal Street in downtown New Orleans on Friday, August 16, 2024. (Photo by Chris Granger, The Times-Picayune)
A worker finishes painting in the pool area at the Hotel Perle at the corner of St. Charles Ave. and Julia St. in New Orleans, Monday, Nov. 18, 2024.
A rendering of the Crescent Hotel next to the Rusty Rainbow footbridge in the Bywater.
A rendering of the hotel proposed for the corner of N. Rampart and Barracks streets.
Craig Baldwin, third from left, pictured with his arm around wife, Molly Baldwin, and six friends in the back yard of the short-term rental house on Baronne Street, where they stayed on their visit to New Orleans in November, 2024.
A streetcar passes in front of the Hotel Perle at the corner of St. Charles Ave. and Julia St. in New Orleans, Monday, Nov. 18, 2024.
Chloe Cosgrove, Michael Bucher and Jack “Buck” Buczkowski at the Hotel Perle at the corner of St. Charles Ave. and Julia St. in New Orleans, Monday, Nov. 18, 2024.
The living space in the four bedroom suite at the Hotel Perle at the corner of St. Charles Ave. and Julia St. in New Orleans, Monday, Nov. 18, 2024.
From left to right, Duff Friend, Hammy Halum, and Damin Halum, stand on a communal rooftop area as they look at a trellis system they plan to have installed at The Mayfair hotel on Canal Street in downtown New Orleans on Friday, August 16, 2024. (Photo by Chris Granger, The Times-Picayune)
A worker finishes painting in the pool area at the Hotel Perle at the corner of St. Charles Ave. and Julia St. in New Orleans, Monday, Nov. 18, 2024.
A rendering of the hotel proposed for the corner of N. Rampart and Barracks streets.
When Mike Bucher and his partners bought the old Blitch Knevel Architects building at the corner of Julia Street and St. Charles Avenue in 2021, they thought about converting the historic Warehouse District structure into condos or apartments.
Instead, early next year the Hotel Perle will officially open as a high-end, hybrid style of lodging that’s becoming ever more popular in New Orleans: It is part hotel, part complex of short-term rentals.
The living space in the four bedroom suite at the Hotel Perle at the corner of St. Charles Ave. and Julia St. in New Orleans, Monday, Nov. 18, 2024.
The three-story property with trendy décor will feature a bar, café, swimming pool and on-site concierge like a boutique hotel. But it has 10 multi-bedroom suites — the largest of which can accommodate at least 14 guests — with full kitchens, living rooms and self-service technology that puts it in competition with short-term rentals instead of traditional hotel rooms.
“People like traveling to boutique hotels. People also like traveling in groups,” said Bucher, whose Urban Properties Development is one of three partners behind the project. “Our concept is to give them both.”
Hotel Perle is among a growing number of hybrid hospitality properties that have popped up in recent years in the Warehouse District, the Central Business District, on the edges of the French Quarter and in other tourist-heavy areas of New Orleans.
Two doors down from Hotel Perle on St. Charles Avenue, the Little Lagniappe Hotel opened earlier this year in a newly renovated historic building. The Mayfair opened this month on Canal Street. Several others are currently proposed or under construction.
Hospitality industry veterans say these hybrids are being built, in part, to cater to a new generation of travelers who came of age in the era of Airbnb and like to stay together on vacations.
A worker fixes the sidewalk in front of the Hotel Perle at the corner of St. Charles Ave. and Julia St. in New Orleans, Monday, Nov. 18, 2024.
Hybrids are also more lucrative for developers. A luxury short-term rental unit can bring in as much in a week as a traditional apartment generates in a month. And because hybrids typically have fewer employees than traditional hotels, they cost less to operate.
But the model has also gained popularity because city regulators have cracked down on short-term rentals, including those in commercially zoned neighborhoods. By getting licensed as hotels, which are subject to stricter regulations than short-term rentals and must pay hotel-motel taxes to the city, operators are able to offer short-term rental style lodging, listed on short-term rental platforms, while staying within the rules.
“If they’re licensed as a hotel and behave like a hotel, it doesn’t really matter how many keys they have in a unit,” said New Orleans land-use attorney Mike Sherman. “The problem comes with short-term rental operators that call themselves a hotel but don’t follow the hotel rules.”
If you can’t beat ‘em, join ‘em
Short-term rentals arrived in the early 2000s when new technology made online platforms like VRBO and Airbnb possible. As they grew in popularity, the hotel lobby tried to fight them through policy and legislation, much like the taxi industry battled ride-share platforms Uber and Lyft.
A hallway at the Hotel Perle at the corner of St. Charles Ave. and Julia St. in New Orleans, Monday, Nov. 18, 2024.
More recently, the hotel industry has accepted that they are here to stay and has adjusted to try and better compete. Most of the major hotel companies now have their own hybrid brands, such as Hyatt House, Wyndham Residences and Apartments by Marriott Bonvoy.
Further blurring the distinction, Marriott recently signed an agreement with Sonder to put Sonder’s 9,000 luxury short-term rentals on its popular reservation system. The deal includes 220 units in New Orleans.
A view of the swimming pool at the Hotel Perle at the corner of St. Charles Ave. and Julia St. in New Orleans, Monday, Nov. 18, 2024.
“Marriott, which has the largest reservation system in the world, has taken the position that if you can’t beat ‘em, join ‘em,” said Lenny Wormser, a hotel broker and executive vice president of HREC Investment Advisors. “Marriott by Sonder is the first of many to come.”
The changes come in response to demand. The majority of visitors to New Orleans still come with just one other person, typically a partner or spouse, according to New Orleans & Co. But the city is a popular destination for festivals and events, weddings, and bachelor and bachelorette parties. The mostly younger crowds those types of events tend to attract are traveling differently than older generations.
According to U.S. Travel, an industry group, Millennials and Gen Zers, who will make up 83% of hotel guests by 2028, take more leisure trips than their parents did and opt for lodging with self-service tech, which gives them more control over their stay.
“We know that what visitors want is changing and technology is driving a lot of the shift in what they do and where they stay,” said Walt Leger III, president and CEO of New Orleans & Co.
Plenty of visitors still stay in a traditional hotel, with single- or double occupancy guests rooms and amenities like a restaurant and bar, room service and front desk staff. But the budget-conscious group traveler increasingly wants apartment-style lodging, according to developer David Fuselier, who is trying to build a hybrid hotel that would be operated by Wyndham next to the Rusty Rainbow foot bridge in the Bywater.
A rendering of the Crescent Hotel next to the Rusty Rainbow footbridge in the Bywater.
“Your top 25% of guests are hotel guests. At the bottom are those who stay in lower-end motels,” said Fuselier, who also owns two small hybrid hotels downtown. “There’s a large chunk in the middle and they’re choosing these apartment-style hotels.”
Worlds collide
While the market has been responding to that shift for several years, an emerging trend around downtown New Orleans is the growing size of the units in these hybrid hotels. Hotel Perle, which is still under construction and only open on weekends for now, has units with five, six, even seven bedrooms.
A hybrid hotel proposed by developer Sam Solomon on the corner of North Rampart and Barracks streets would have seven units with 27 total bedrooms, including two with 10 bedrooms each.
The Mayfair, which developer Mohamed “Hammy” Halum recently opened in the 1000 block of Canal Street, has four-bedroom units, some with double-queen rooms or bunk beds along with sofa beds that can sleep up to 16.
The Mayfair hotel, far left, being built next door to The Ruby Slipper on Canal Street in downtown New Orleans on Friday, August 16, 2024. (Photo by Chris Granger, The Times-Picayune)
“We designed this for large groups who are traveling together because that’s how people like to travel today,” Halum said.
Those large groups are easy to spot in the city’s tourist districts. On a recent Friday morning, a group of 10 men, clad in t-shirts, shorts and baseball caps, filed out of a short-term rental house on Baronne Street and headed towards the Warehouse District for what one described as a full day of activities, though they declined to say what their plans entailed.
A few doors down, Craig and Molly Baldwin and three other couples emerged from their own luxury short-term rental, which had five bedrooms and a private pool. While waiting for an Uber to take them to brunch, the 30-somethings explained why they no longer book a block of rooms in a traditional hotel when the take their annual friends’ trip.
Craig Baldwin, third from left, pictured with his arm around wife, Molly Baldwin, and six friends in the back yard of the short-term rental house on Baronne Street, where they stayed on their visit to New Orleans in November, 2024.
“This kind of set up is actually much nicer than a hotel and it’s more cost-efficient,” said Craig Baldwin, whose group paid $2,100 for the house for three nights, about $175 per couple per night. “And if you’re with family or friends that you’re comfortable staying with, it makes for a fun environment.”
Given the demand for such properties, even developer Jayson Seidman, who made a name for himself developing high-end boutique hotel properties, including the Hotel Saint Vincent in the Lower Garden District, is dipping his toe into the hybrid hotel space. His newest project, the Hotel Henrietta on St. Charles Avenue, has a few multi-bedroom suites mixed in with traditional rooms.
“I see the hotel world and the apartment world colliding,” he said. “I thought, why not approach it through the lens of a hotel owner and operator and deliver this apartment-style product with really great service?”
Following the rules?
When hybrid hotels operate as hotels, they bring a new type of product to the market. The problem, according to Wormser, is if they don’t follow the rules, which gives them an unfair advantage and, potentially, puts guests at risk.
“We’re capitalists in the hotel industry and we’re not afraid of competition,” Wormser said. “But if you don’t have a legitimate front-desk staff and you don’t follow life-safety codes, and you can charge lower rates, you’re not playing fair.”
A catwalk with glass block as a window at the Hotel Perle at the corner of St. Charles Ave. and Julia St. in New Orleans, Monday, Nov. 18, 2024.
According to the city’s zoning code, hotel operators are required to maintain a staffed front desk and also have sprinkler systems and other building-safety infrastructure.
Of the 250 or so licensed hotels in the downtown area, at least 11 appear to have no front desk staff and were only accessible by a keypad.
Sherman said since the city banned commercial short-term rentals in 2023, “some operators claim to be hotels when, really, they’re short-term rentals.”
Hotelier Michael Valentino, who operates seven traditional hotels in the French Quarter, said the hotel industry welcomes competition from new types of properties. But he wants the playing field to be level.
“If there is a new place in the market and consumer acceptance of a new model, you need to take that into consideration,” he said. “But you have to make sure it’s done right.”
Email Stephanie Riegel at stephanie.riegel@theadvocate.com.
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