Bethesda, Maryland-based real estate investment trust (:REIT) RLJ Lodging Trust (RLJ) recently opened its seventh property – Hotel Indigo New Orleans Garden District – after an extensive brand conversion in Louisiana. The move was in line with the company’s planned capital strengthening program.
RLJ Lodging has been largely focusing on upgrading and repositioning 24 hotels that it acquired in 2010 and 2011. Among these, seven hotel brand conversions were slated to be completed by 2012. Hotel Indigo New Orleans, which marked the seventh and the final property, is now open for business. The previously converted properties include Hilton Garden Inn Pittsburgh University Place, Hilton Garden Inn Durham and Embassy Suites West Palm Beach-Central.
RLJ Lodging acquired the distressed independent hotel in 2010 for $6.4 million. Subsequent to a comprehensive renovation worth $16.9 million, the company reopened the property under the Hotel Indigo brand. Hotel Indigo is an upscale boutique brand of renowned hotelier, Intercontinental Hotels Group plc (IHG).
Post-renovation Hotel Indigo New Orleans Garden District comprises 132 rooms. Positioned in the historic Garden District along the St. Charles Avenue Streetcar Line, the hotel is conveniently connected to renowned business and leisure attractions of New Orleans – such as the French Quarter, Tulane and Loyola University and Babin's Bar & Bistro.
New Orleans, the largest city and metropolitan area of Louisiana, is among the top 10 most visited cities in the U.S. The city boasts a variety of tourist attractions, which acts as a major catalyst for growth of the economy. The city was also among the major victims of Hurricane Katrina in 2005. However, the city continues to show strong recovery and has been experiencing a robust population and tourism growth in the recent years.
According to the New Orleans Convention & Visitors Bureau (‘CVB’), this city welcomed around 4.9 million visitors in the first half of 2012 – a 2% increase over the same period in 2011. The organization expects New Orleans to host around 13.7 million visitors by 2018. Moreover, the RevPAR (Revenue Per Available Room) in New Orleans has increased 15.9% year-to-date through November 2012, according to Smith Travel Research, Inc. The increase surpassed the figures of some high revenue generating markets such as San Francisco, Los Angeles, and Boston.
The abovementioned fact justifies the RLJ Lodging’s decision of choosing the city of New Orleans. Management also expects the Hotel Indigo brands’ popularity to benefit the new property going forward.
Currently, RLJ Lodging has been highly active on the acquisition front in key gateway markets of the U.S. like Washington DC, New York City and others. In the last two months, RLJ Lodging debuted in the Greater Boston market and Miami with the acquisition of Embassy Suites in Waltham and Hilton Cabana Miami Beach, respectively.
RLJ Lodging carries a Zacks #2 Rank (short-term Buy rating). One of its peers, Franklin Street Properties Corp. (FSP), holds a Zacks #1 Rank (Strong Buy).
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