The recently opened MGM Grand Hotel
is a glassy gem of a tower with 400 guest rooms, a mammoth spa, five restaurants and lounges. The MotorCity Casino Hotel
, set to open this month, will add another 400 rooms to Detroit, and a similar array of amenities, like a sybaritic "pillow library." The Detroit Marriott Hotel
at the GM Renaissance Center
is about to go shiny, new and high-tech, and a handful of other hotels downtown are in the midst of renovations, upgrades or new construction.
All told, the hotel industry is pouring more than a billion dollars into downtown Detroit — a market that hasn't historically been kind to hotels, with occupancy rates averaging between 55 and 60 percent. But experts predict that things are about to change.Building a destination
For the casino complexes, creating a viable hotel means creating an entertainment center, says Scott Grigg, public relations director of the MGM Grand Detroit.
"The concern in Las Vegas (when the hotel building boom started), was where are all the customers going to come from?" he says. "What they found happened was in building all these new hotels Vegas became known more as an entertainment destination than a gaming destination, and that's kind of what we're hoping will happen here in Detroit."
Grigg says the concept behind the MGM Grand complex — where rooms start at $299 and a suite can cost up to $4,000 — is that a Michigander from Bay City or Lansing might venture to Detroit for a weekend of fine dining, pampering at the hotel's spa and entertainment at the hotel's nightspots.
"We're aiming at the regional market and non-gamers," he says. "It's more of an entertainment destination than 'Come on, let's go down and game.'"
No less important than tourism is the convention market, and Detroit, says Christopher Baum, senior vice-president of sales and marketing for the Tourism and Economic Development Council
, is well-positioned to rake in convention dollars.
"We are now arriving at a so-called 'tipping point
' for Detroit," Baum says. "With the exposure the city's received from things like the Super Bowl and the PGA championship as well as news getting out that we've worked on our river front and all these new casino hotels ... we have finally gotten to point where peoples' perceptions have changed about Detroit, and they're now taking a look at it."
The TEDC, Baum says, is signing more contracts for meetings than ever before, with eight citywide (read "big," and "lucrative") conventions signed this year to date. Baum expects to finish the year 50 percent up from last year, and that's good news — each citywide convention, he says, is worth between $5 million and $20 million.
"Groups that are requiring, say, 3,000 rooms a night for a city-wide convention — in the past we would have to leave downtown," Baum says. "It makes us a much more viable option."
For the Detroit Marriott at the Renaissance Center, conventions are a sine qua non of raising occupancy rates, says public relations director Matt Jones. The corporate rate for a room at the Marriott is $279 nightly.
"We've got to continue to grow our occupancy levels, and the only way to do that is group conventions," he says. "Our goal is to break 70 percent occupancy."
The Marriott, he says, is soon to renovate all of the hotel's guest corridors and bathrooms, installing high-tech upgrades like plasma TVs and interconnectivity options for personal electronics.
"Our customers are asking for it, really," he says. "Primarily our customers are well-traveled within the Marriott brand, and the company as a whole is going in direction of offering the best hotel out there."
The upgrade, Jones says, will cost about $13 million, including a "reconcepting" of the hotel restaurant and lounge, a renovation of the lobby and the addition of a new, yet-to-be named lounge.Seeking an even split
The MGM Grand hotel is also courting the convention market, with high-tech, large-scale meeting spaces, but Grigg says it's hard to say, with only a few weeks' business under the hotel's belt, if business will skew toward gamers, conventioneers or non-gaming vacationers.
"We're offering amenities you just can't find under one roof anywhere else," he says.
Jennifer Kulczycki, media and community relations manager at the MotorCity Casino, says her group anticipates an even split between gaming and non-gaming guests. A standard room runs about $329 a night at the MotorCity hotel.
Like Grigg, she says her group is gambling on the hope that the new hotels will create interest in downtown Detroit as a destination.
"The new hotels are attempting to provide a new product in which we would hope to turn the city into a new destination by providing gaming and other entertainment options," she says.
Grigg says the hotel must become a viable business entity on its own — the days when a casino would subsidize a low-occupancy hotel are over.
"In Vegas, 15 years ago, you didn't worry too much about the hotels," he says. "The casinos kind of supported the hotels, but the days when you had 400 rooms in the hotel and five guests — it doesn't work that way anymore in Vegas."
Tourism and convention business can play an important role in downtown revitalization, says Jason Booza of Wayne State University.
"You look at cities like Detroit whose economic base has severely eroded, and you say a lot of cities have — hey, Orlando can do it, Vegas can do it, let's try it," he says.
But Booza warns that an economy based on tourism and conventions is subject to the kinds of disruptions that occurred after the 9/11 attacks, when Americans were reluctant to fly, or economic downturns that keep vacationers home.
"One little hiccup can spell disasters," he says. "But Detroit's got to do something, and the TEDC and the chamber (of commerce) have put a lot of effort into building the tourist industry."
The downtown hotel situation, Grigg says, is physics — if you create enough motion, things will happen.
"I think that between all three casinos, there is that perception of, what are you guys going to do with all those hotel rooms?" he says. "But I think it will create an entirely new market for people who want to come to Detroit and do things."
Photos:The Fort Shelby and Book Cadillac Hotels Undergoing RenovationsThe New MGM Grand HotelThe Pontchatrain Hotel Has Become a SheratonThe Marriot at the Renaissance CenterA MotorCity Casino Hotel Room, courtesy MotorCity CasinoThe Hilton Garden Inn at Harmonie Park
All Photographs Copyright Dave Krieger