LaSalle's Second Boutique Hotel Opens Amid DC's Tourism Slump

WASHINGTON, DC-.The dampening effect on tourism in the nation’s capital caused by the Sep. 11 terrorist attacks has not stopped Bethesda, MD’s LaSalle Hotel Properties from moving forward with the opening of its second of four high-end boutique hotels. The red-themed Hotel Rouge will open its doors Dec. 14, offering 137 crimson-colored rooms. Individual figures for the purchase and renovation of Hotel Rouge are not available, but LaSalle has invested approximately $74 million in the four-property project. The first remodeled property of the group opened in October as the Topaz Hotel & Bar.

“The short-term impact of recent events notwithstanding, Washington, DC. remains a high growth urban market with significant barriers to entry and strong growth in room demand in all segments, including commercial transient, group and leisure/tourism over the long term,” explains LaSalle COO Michael Barnello. The property is designed to appeal to a segment of travelers that prefers the more unique, trendy alternative to the bevy of chain hotels in DC.

San Francisco’s The Kimpton Hotel & Restaurant Group will manage the property. “[Kimpton officials] do a very good job of marketing their hotels,” says Legg Mason Managing Director and Lodging Analyst Rod Petrik. “When I look at the West Coast, particularly San Francisco, Kimpton has been very successful.” The District consistently plays host to an international crowd, which Petrik believes will be drawn to the hotels’ European décor. As for the timing, he concedes that this is not the perfect climate in which to open a hotel. “The fourth quarter is probably gong to be the worst quarter for hotels in 10 years,” he says. But Petrik does credit LaSalle for certain timely business decisions. “What was wise–they committed to the properties in the summer–is they chose not to come online with all four properties at once.” He speculates that the company will likely not redevelop the two remaining properties until the market displays signs of recovery.