- The Washington Times - Tuesday, September 20, 2005

The tourists won’t be returning anytime soon, neither will most business travelers. But the nation’s hotel operators are scrambling to reopen inns shut by Hurricane Katrina to meet demand from a new wave of guests — relief workers, insurance adjusters and others.

An influx of emergency teams, insurance agents and power company crews has sent the need for hotel rooms in the area around New Orleans soaring — at the very time hotel chains are least able to meet it. Companies are working to repair scores of damaged properties, even though it is uncertain whether and when New Orleans and other damaged areas will attract the number of visitors they once did.

“If you have a hotel that can be opened, if you’ve got power and you can provide a safe bed for someone to sleep in, you are going to have 100 percent occupancy,” said William Crow, a lodging industry analyst with Raymond James & Associates.

The job of reopening hotels is complicated because the workers needed to run them were among those driven away by the storm. To bring them back, some hotels are setting aside large numbers of rooms to house staff.

Marriott International Inc. had tracked down about 2,400 of its 2,800 workers by last week and plans to set aside about 25 percent of the rooms in each hotel to house employees.

Major hotel chains have dispatched emergency response teams to the region to mop up flooded lobbies, track down scattered workers and get rooms ready. Lingering power outages and swamped public water systems have hindered their ability to reopen.

“Even in foreign countries, we have not seen anything like this,” said Jeff Wolff, a regional vice president for Marriott who is overseeing the Bethesda company’s 400-person disaster response team.

Recovery has been slow. As of Friday, only 12 percent of hotels in Louisiana closed by Katrina had reopened, according to a phone survey the Internet travel company Priceline.com took of hotels that are part of its booking service. In Mississippi, the figure was 21 percent.

Hotels faced the biggest challenges in New Orleans. The usually bustling tourist and convention destination with 38,000 rooms was evacuated after levees burst, flooding the area. Many of the hotels were in the relatively unscathed French Quarter and escaped major damage, but sewer services, water and power have not been restored in many areas.

Despite the catastrophe, hotel demand is booming in New Orleans as recovery workers flock to the area. New Orleans officials have said the city could open earlier than expected, and the French Quarter may be open by the end of the month, although another approaching storm could cause delays.

Starwood Hotels and Resorts, which incurred only minor damage to a Sheraton and two W brand hotels in New Orleans, booked rooms again last week, thanks in part to emergency generators and potable water tanks that are refilled with 200,000 gallons each day, according to company spokesman Bruce Hicks.

The company is advising guests to drink bottled water, and amenities such as room service won’t be available for a while, but restaurant service began over the weekend.

Weary reporters fill some of the rooms, and Starwood has signed a 750-room contract with the Federal Emergency Management Agency to house relief workers.

Marriott had power back at its two big downtown hotels last week, Mr. Wolff said, but water service was still unreliable. To compensate, the company brought in a portable sewage system that will help it run independently of the public infrastructure.

Not all hotels were as lucky. The Hyatt Regency New Orleans, a 1,100-room facility, had to be “shrink-wrapped” with a protective covering after hundreds of windows were blown out, according to Laurence Geller, president and CEO of Strategic Hotel Capital, which owns the hotel.

Officials from the mayor’s office, power companies and others are housed there now, but the hotel’s Web site says it won’t take in everyday guests until the end of 2006.

Evacuees have been placed in hotels far from the Gulf, creating demand in areas untouched by the storm. In Georgia, 21,000 Katrina victims are being housed in hotels. FEMA and the Red Cross have placed evacuees in Choice Hotel franchises as far away as West Virginia and California, according to company spokesman Robin Ferrier. The Red Cross is picking up the tab for some of the rooms.

In Louisiana, companies are not allowed to remove evacuees for guests with reservations under a state law.

Choice franchises have called some guests with reservations at hotels in several states to ask them to give up their rooms for evacuees, including some with reservations who planned to attend a recent Florida State University football game, she said.

The post-hurricane scene was more grim in other regions.

Choice Hotels, a Silver Spring company that franchises Comfort Inn and Econolodge hotels, had seven hotels in Mississippi that were severely damaged, including four in Biloxi that were closed indefinitely.

“It is still up in the air whether those will reopen or not,” Mr. Ferrier said.

Also unknown is what effect the storm will have on the lodging industry’s financial outlook. Most hotels were covered by insurance.

Hilton Hotels Corp., for example, said it is covered by up to $54 million in business interruption insurance, along with nearly $350 million in insurance for property and contents.

The region represents only a fraction of business for the big chains.

Marriott’s 15 hotels are among the 2,600 it runs worldwide.

Hilton said New Orleans represents only about 5 percent of its total annual earnings before taxes and other factors.

“In the big scheme of things, it really doesn’t hurt us that much,” said Matthew Hart, Hilton’s chief financial officer, in a recent conference call.

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