Market Snapshot: New Orleans
NOLA Bore The Brunt Of The Pandemic
New Orleans’ hotel sector, which has historically been almost exclusively reliant on leisure and group business, including large numbers of international visitors, was hit especially hard in the early stages of the COVID-19 pandemic.
Photo by The Plasencia Group
Leisure demand has carried the New Orleans hotel market throughout the pandemic and allowed it to thrive in 2022, posting all-time high RevPAR results for both the YTD and TTM periods ending in October. Group continues to lag in the wake of the pandemic. While this is a bit of a concern, it is promising that higher-rated leisure demand has more than made up for the group sector’s deficiency. When (and it is a matter of when, not if, in our opinion) group business begins the recover more fully, the incremental demand gains will make for even higher revenue results for area hotels. Even if the group piece of the pie isn’t as large as it once was, the pie as a whole will be much larger!
New Orleans’ hotel sector, which has historically been almost exclusively reliant on leisure and group business, including large numbers of international visitors, was hit especially hard in the early stages of the COVID-19 pandemic.
Throughout 2020 and into 2021, while leisure destinations near beaches, mountains, and other outdoor activities thrived, local government mandates closed or limited visitation to the city’s famed and mostly indoor attractions, such as bars, restaurants, museums, and music venues. Sporting events and festivals, including Mardi Gras and Jazz Fest, were canceled. Broader consumer concerns around air travel, be it domestic or international, also greatly affected inbound visitors. Large associations, corporations, and other groups put their conventions and events on hold indefinitely during COVID. Usually a stalwart within the local demand dynamic, the group segment evaporated to virtually nothing, with the Ernest N. Morial Convention Center sitting empty for months on end.
Our firm worked on several transactions in New Orleans during the pandemic and our team members made routine trips to the city. The environment on the ground was eerily quiet, with Bourbon Street devoid of revelers and high-end restaurants sitting mostly empty during the dinner rush. All told, in the depths of the pandemic, RevPAR in New Orleans fell more than any top 25 market in the country besides Oahu and San Francisco.
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