The Saint Hotel on Canal Street, best known before the pandemic for live music at its bordello-inspired Burgundy Bar, has new owners who come with a reputation for taking on high-profile hotel revival projects.
New York-based developer Eric Birnbaum’s Dreamscape Companies, which has raised $1 billion to invest in such projects, bought The Saint in March for $40 million from Dallas-based hotelier Mark Wyant, who has owned the historic building at 931 Canal Street since he bought it for $5.35 million in 2010.
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Built in 1910, the building had originally been planned as a hotel but instead became an office complex with retail shops in its early years. It was the location of the downtown Woolworth’s for a spell, before that retailer moved to a different location on Canal Street.
There were several attempts in the 1990s and early 2000s to convert the property into a hotel, but they faltered for various reasons. The building ended up abandoned until Wyant, a former American Airlines pilot, and his mother bought the property and spent $39 million to convert it into a 171-room hotel that opened in late 2011.
Under Wyant, the hotel has developed a distinctively hedonistic vibe. In addition to the Burgundy Bar, which had featured the burlesque performer Trixie Minx among its regular acts before the pandemic, there is also the restaurant Tempt, with its devil’s pitchfork logo. The theme is continued on the second floor, where the premier suite at the end of the purple-lit hallway is dubbed The Lucifer.
Birnbaum said they haven’t yet decided what kind of design and branding they’ll bring to the hotel, although substantial changes are planned.
“It’s early for us to divulge how we’re going to reposition it, but suffice to say we’ll put our own spin on it and, hopefully, make it something that everyone is drawn to,” he said.
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He points to a project he recently completed in South Beach, Miami, as an indication of what to expect: The Goodtime Hotel, which is fronted by the hip hop entrepreneur Pharrell Williams and Miami club owner David Grutman.
Designed by Ken Fulk in many shades of pink, Grutman told Architectural Digest that “the striped pastel tiling in the pools, the entryway downstairs with its tropical murals, the scalloped bar chairs” give the hotel “a throwback resort vibe.”
But, said Birnbaum, while “this asset is not going to be a Goodtime, we obviously do care about design and positioning. From an architectural and design standpoint [the Goodtime] gives you our taste level and how we think about the world.”
Dreamscape has partnered with Aimbridge Hospitality, based in Plano, Texas, for its hotel projects since its first acquisition last year: the boutique Warwick Hotel in Philadelphia’s Rittenhouse Square. Aimbridge also will be the management company for Dreamscape’s huge project to renovate the 2,522-suite Rio hotel and casino in Las Vegas.
At The Saint, Aimbridge’s Sam Carlton and Skip Adams are managing the initial revival of the hotel’s operations. They are currently looking for a new chef and management company for Tempt, which they expect to reopen sometime in May. They also are planning to bring back live music at The Burgundy and extend its opening hours, now that restrictions have been eased further in the city.
Scott Broder, who joined Dreamscape as head of hospitality acquisitions in March, said the company is betting big that leisure will rapidly recover after a year in survival mode.
He said the wave of foreclosures and bankruptcies that had been expected in the hotel sector never came, though it could still be in the offing as bankers become less forgiving about loans.
Still, The Saint, at $40 million, was a bargain: it would cost at least twice that to build a similar-sized hotel from scratch, Broder reckons. “We’re not the only ones who’ve noticed that either,” he said. “Banks also will be reluctant to finance new projects, which means it’ll slow new supply and further help the market to rebound.”
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Broder said the immediate prospects for New Orleans’ leisure sector look good.
“We expect the month of May at The Saint we could see 80-to-90% occupancy on weekends,” Broder said.
The latest hotel occupancy data from STR, which tracks the sector nationally, showed that occupancy rates for the week ended April 24 were at about 55% on average in New Orleans, compared to less than 20% in the same week last year. The occupancy rate and room-rates hotels can charge have improved steadily in the first four months of this year, especially since the vaccination program was rolled out.
In its latest national report, STR also said it expects the market to remain steady until it takes off after Memorial Day. “Overall industry occupancy will likely remain plateaued until the summer leisure travel boom,” the report said.
Broder said they expect that the big conventions, which are a large part of the New Orleans market, will begin to start rolling again from the third quarter and pick up steam next year.
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“Things are certainly better than they were a year ago but they’re not great, not yet,” said Birnbaum. “It’s not like people are travelling as much as they were and I think there is still going to be opportunity to buy hotels three to six months from now.”
The sale price for The Saint works out at about $234,000 per room, compared to an average sale price per room for New Orleans hotels last year of $129,000, according to CoStar, which recently bought STR.
Chelsea McCready, Director of Hospitality Analytics at CoStar said that the average transaction price last year was down from $184,00 per room in 2019 and $205,000 in 2018. But she notes that the average prices cover all kinds of hotels, from budget to luxury, whereas The Saint is classified as “upper upscale”. She attributes the sharp decline last year to both pandemic discounts and the fact that most hotels sold were in the lower “limited service” category.
The sale of The Saint by Wyant hasn’t meant he is scaling back on hotel ventures.
The hotelier just bought last month the historic Hotel Galvez & Spa, his third hotel property in Galveston, Texas. He still owns a portfolio of boutique hotels, including The Saint-branded hotels in Key West, Florida and in Charleston, South Carolina.