Hotel prices reflect Detroit's trendy reputation

Posted on October 26, 2016

If you’re a Detroiter looking for a bargain hotel in downtown, or a visitor from another corner of Michigan, being a tourist in the Motor City isn’t quite the deal it used to be.

And while the recent increase in the average downtown room rate might stress the pocketbook, experts says it’s a strong harbinger of Detroit’s continued economic turnaround from the depths of the Great Recession. The stronger demand also has brought more new hotel construction to greater downtown the past couple years, representing new jobs and fresh investment. That’s more good news.

“I think the downtown is the place to be, and there’s a perception that it is safer and hip,” said Chuck Skelton, president of Hospitality Advisors in Ann Arbor, who says the demand for downtown Detroit rooms has gradually increased since 2010. “I believe all the dynamics of businesses actually having employees downtown, as well as people living there and the activities like casinos and professional sports has contributed to the growth.“

The average downtown Detroit hotel room rate is now $153 a night, plus (15%) tax, according to the Detroit Convention and Visitors Bureau. That represents about a 4% increase over last year.

Rooms for $175, $250 or even $300 a night are increasingly common, especially on busy weekends and during special events. Some hotels now require a two-night minimum stay for certain weekends, such as the Free Press Marathon.

Why are rates rising? Simple supply and demand. The downtown hotel occupancy rate through August of this year was nearly 70%, according to the CVB. In 2008, it was only 47%. Rates and occupancy are up nearly 4% over last year. When you’re popular, you can charge more.

“We are constantly getting calls from people who can’t believe how expensive it is to stay downtown,” said Zach Fairchild, co-director of the Detroit Hostel, which caters to independent international travelers who want to visit the city. “We are trying to fill a niche.”

Detroit has about 5,000 hotel rooms downtown, up from about 3,000 10 years ago, the CVB estimates.  Four downtown hotels are AAA-rated four-diamond properties: the MGM Grand Detroit, Westin Book Cadillac, Motor City Casino Hotel and the Greektown Casino Hotel, which was added to the list in October.

The last hotel to open downtown was the Aloft Detroit in 2014, transforming the historic David Whitney Building near Grand Circus Park. But several new boutique hotels with a total of 916 rooms are either under way or on the drawing board for 2017 and beyond. They include the Shinola Hotel, Element Hotel, Wurlitzer Hotel, West Elm Hotel, Detroit Fountain Hotel, and an unnamed “athletes’ hotel” near the new Little Caesars hockey arena.

Continue reading full article here on Detroit Free Press.