Is a hotel in Fontainebleau State Park feasible? Study says yes. Others doubt it.

St. Tammany Parish’s supply of hotel rooms far outstrips the current demand, according to a study paid for by the parish’s tourism commission, but even so, consultants say a 150-room hotel and conference center should be developed at Fontainebleau State Park near Mandeville.

Not everyone agrees. 

The St. Tammany Parish Tourist and Convention Commission hired Pinkowski & Co. to conduct a $28,000 feasibility study on the project at the request of Lt. Gov. Billy Nungesser.

Nungesser has been pursuing public-private partnerships at various state parks to prop them up financially, and the study says a Fontainebleau State Park Lodge and Conference Center would boost revenue and profits for the park while promoting the north shore as a tourism destination.

The lodge and conference center, which would offer views of Lake Pontchartrain, is projected to generate $1.8 million in cash flow in 2021, its first year, growing to nearly $2.3 million by 2025.

Occupancy is projected to increase from 55% the first year to 62% four years later.

In 2018, the national hotel occupancy rate was 66.2%, according to the study, well above the 54% in St. Tammany the same year.

Currently, St. Tammany has just over 3,000 hotel rooms, the study says. From 2005 to 2018, its supply went up 78.2% but demand increased by only 43.7%. That’s resulted in occupancy falling almost 28% from its peak, the consultants say.

But the report is upbeat about the prospects for the proposed hotel, listing nine advantages such as its proximity to retail, dining and entertainment options and the Pelican Park/Castine Center complex, as well as its location in a state park.

The project would diversify the local lodging market, the study says, arguing that the North Shore Harbor Center near Slidell is currently underused for conferences because of a lack of nearby hotel space.

The study cites only two disadvantages: questions about what sort of room rates the facility can charge and the poor performance of the local lodging market.

In fact, it points to the market’s weak performance as a factor that will prevent any new competition, saying it’s “doubtful that there will be any new hotels built in the market in the near future.”

But the study is raising some eyebrows.

Mandeville resident Charles Goodwin, a frequent critic of government spending, is part of a group circulating a response that questions the project’s impact on local business.

“The study says this project will take business away from up to 14 existing businesses in Slidell and Covington,” the group says. It adds that the hotel would pay no property taxes because it would be built on state property, and that the hotel might cause a decline in campers and people who rent existing cabins at Fontainebleau.

They also question the need to raise additional revenue at a park that they said brings in $1.3 million a year, with expenses of $1.2 million. “If more revenue is needed, simply raising the entrance fee from $2 to $4 seems to be a better solution,” they said.

The study fails to take into account plans for an 88-room hotel near the Fremaux Town Center in Slidell that were just announced and for a hotel in the stalled Port Marigny development in Mandeville, Goodwin and others say.

Ernest Burguières, a former Mandeville City Council member, is also skeptical. He points to the recent closure of the Clarion Inn and Suites on U.S. 190, saying that all north shore hotels are struggling.

“People in government continue to think of multimillion-dollar investments like fruit on a tree that merely has to be plucked,” Burguières said in an email. “The Fontainebleau Park study even acknowledges that it will have a negative impact on neighboring hotels. So why do it?”

Mark Myers, who is chairman of both the Tourist Commission and Harbor Center boards, said that the closure of the Clarion, which had an attached meeting venue, “has ramped up the need for a combined facility. But we are cognizant that we have two existing venues that need to be part of the conversation: the Harbor Center and the Castine Center.”

Donna O’Daniels, president and CEO of the Tourist Commission, said the loss of the Clarion makes the consultants’ projections “look even more feasible.”

The commission’s mission is to encourage the development of products that help tourism and economic development, she said, and market research has consistently shown that visitors want more waterfront amenities.

“It’s one of the top three things that they would like to see more of,” she said.

Lacey Osborne, president and CEO of the St. Tammany West Chamber of Commerce, said the study’s findings will be presented to the chamber’s board. “We are going into it with an open mind. This is not a brand-new idea; it’s something that has been talked about for a year,” she said.

The next steps for the project will include forming a steering committee of industry and community stakeholders, David Young, Nungesser’s director of public private partnerships, told the Tourist Commission last week.

That committee will gather ideas and assess the interest of developers, he said, adding that the process likely will take two to three years.

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July 4, 2019 at 02:16PM

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