Asian-American-owned company will renovate New Orleans Cotton Exchange Hotel into boutique, lifestyle brand
to appeal to Gen X and Y travelers…
Tuesday, September 24, 2013 – AN ASIAN-AMERICAN-owned hotel company will be the first to bring Marriott’s AC Hotel to the US.
NewcrestImage of Dallas, Texas, will convert the Cotton Exchange Hotel in New Orleans to the upscale, modern brand first developed in Spain.
AC Hotels by Marriott was launched in 2011 as a joint venture between Marriott International and Spanish group AC Hotels, which was founded in 1998 by Antonio Catalán. Today, AC Hotels by Marriott has a portfolio of 79 hotels in Spain, Italy, Portugal and France, encompassing nearly 9,000 rooms.
Marriott decided to launch the brand in the Americas to capture Gen X and Y travelers with its simple, clean and crisp lines that marry sophisticated European style with “approachable” design for a distinctly urban feel. Each AC Hotel, said Marriott, reflects the uniqueness and character of its location.
Mehul “Mike” Patel, the 37-year-old CEO of NewcrestImage, said the company bought the Cotton Exchange Hotel – a former Holiday Inn Express franchise – through a bidding process in June after it foreclosed. “We heard there was going to be a foreclosure sale, so we put together a game plan and outbid the competition.” The other bidders for the 223-room asset included hoteliers that held licensing agreements with InterContinental Hotels Group (Holiday Inn), Marriott International (Fairfield Inn & Suites), Hyatt Hotels (Andaz and Hyatt Place) and Choice Hotels International (Cambria Suites).
Paying $17.8m for the historic landmark, NewcrestImage expects to spend another $12m on renovations to transform it into the upscale AC Hotel. The “lifestyle” boutique hotel is expected to open in March, said Patel.
“By importing AC Hotels by Marriott into the US, we believe we can increase Marriott’s overall market share among younger business travelers who make three or more business trips a year, representing a total market size of $31 – $35 billion,” said Brian King, global brand officer, Marriott Endorsed Brands. “We have identified an industry void among consumers who are connected, communal and curious with an urban spirit and desire a design-focused hotel brand that is widely distributed.”
AC Hotels by Marriott has high brand recognition in Spain and is among the 50 best valued brands within that market. There are five AC Hotels by Marriott in the company’s global development pipeline, and there is strong interest among owners in developing the brand in the North and South America.
The Cotton Exchange building is 150 years old and is designated as a National Historic Landmark. Patel said he expects to offset the cost of development through the use of government-sponsored programs such as state and federal Historic Tax Credits, the EB-5 foreign investment program and New Market Tax Credits as well as other job-creation programs that extend tax breaks to employers in economically distressed areas. If all goes according to plan, the project could turn out to be practically cost neutral, said Patel.
The New Orleans Cotton Exchange operated on the site from 1871 until 1964. The building has undergone numerous renovations over the years. “Now we look forward to an exciting new chapter in the hotel’s rich and impressive history,” said Patel in an earlier statement.
NewcrestImage has been recognized for renovating another historic property, the Fisk Building in Amarillo, Texas, which dates back to 1927. After transforming the structure into a Courtyard by Marriott, Patel’s company won the Best Adaptive Reuse Award in 2011 from the Texas Downtown Association.