The New Orleans City Council recently overrode City Planning Commission to approve the proposed ground-up construction of a 14 story Virgin Hotel. The Planning Commission denied the proposal based on a requested variance to exceed the zoning’s allowed height by 23 feet. The proposed hotel will be located at 550 Baronne Street in the CBD. The hotel has an estimated development budget of $55M and will include 183 rooms, a roof top poor and bar, a ground floor restaurant, a ball room, meeting spaces and fitness center. Parking will be accommodated in a nearby 596 space garage currently under construction.
Virgin Hotels and Virgin Airlines are owned by billionaire Richard Branson. The City Council’s approval was influenced in part by a push to attract Virgin Airlines to New Orleans’ airport.
The Virgin Hotel approval comes on the heels of the recently publically announced early 2016 opening of The Ace Hotel at 600 Carondelet Street. The Ace Hotel brand is a boutique-style property that will feature 234 rooms. Ace Hotels are located in seven other cities including London, New York, Los Angeles, Seattle and Panama.
Local developers and investors are also making waves in new hotel development. A former sugar warehouse located at 111 Iberville Street in the French Quarter, in the parking lot adjacent to Canal Place, will be converted to an approximately 80 room luxury hotel under local ownership. This will be the first new hotel in the French Quarter since a moratorium was enacted in 1969 that has prevented new hotel development.
These three new hotel developments will add close to 500 rooms to the New Orleans hotel inventory. Several other developments that have yet to be made public could add hundreds more rooms to the New Orleans market, which has blossomed into one of the top hotel markets in the U.S.
In addition to these new hotel developments, there has been over a billion dollars in hotel transactions since 2010. The New Orleans market’s ability to attract outside capital is very positive signal that the overall health of the market is strong.