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Dim Days for Luxury Hotels - Joe Sharkey - ny times.com Oct. 28 |
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Excellent review on how quickly times have changed, and near-term prognosis
“Even as midprice hotels began losing business this past summer,” Sharkey writes, “ luxury hotels continued to fill their rooms. Companies treated the hotels as perks for top executives and quality locations for high-level business meetings. And many leisure travelers considered a stay at a top hotel — even for a couple of days — to be worth the cost.
Since mid-September, almost in parallel with the stock market turmoil, demand for fancy hotel rooms has plummeted.
Yes, Times have changed! Quicktime Sharkey takeaways:
- Public indignation over big paydays and the lavish expenses of top executives hurts luxury hotel business. Companies concerned about perceptions, how it looks to others when employees stay in hotels whose very names evoke images of opulence
- Financial services and other companies have quietly advised employees against using luxury hotels. Again, perception--- how it looks if you’re laying off 10 percent of your work force and you have people staying at $500-a-night or $1,000-a-night hotels Read More
- Price Discounting? It is axiomatic among top-tier hotels that price
discounting is detrimental to brand prestige. But many owners,
pressured by credit and mortgage debt, want more revenue now and are
pushing for aggressive discounting.
- What does all this mean for the business or leisure traveler who is
still able to stay at a top-tier hotel? Better bargaining power, hotel
insiders say.
- “In the past, when we would approach a five-star hotel, they wouldn’t
be interested in discounting because that’s going against their brand,”
said Noah Tratt, the vice president for supplier strategy at Egencia,
the corporate travel management company of Expedia Inc.
That intransigence is weakening in many markets where “they are very
willing to negotiate in the corporate channels on a private price that
essentially doesn’t undermine their published rates,” he said.
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