The NYU Hospitality Investment Conference in New York is a premier get-together for the hotel industry – and this year was no exception. While the climate for financing luxury resorts and hotels today is noticeably chilly, and the US outlook was clearly cautious, the overall  global picture seemed to us distinctly positive.  With a record 2400 delegates in attendance at the Waldorf Astoria, much of the buzz was less about the economy than about two executives who were not even on the agenda.

Those two were Ross Klein, who had headed up Starwood’s Luxury Hotel Group – including W, St. Regis and Luxury Collection; and colleague Amar Lalvani from Starwood Hotels – both leaping to Hilton as that company seeks to jump into the boutique segment of the industry. They will become Global Head of Luxury & Lifestyle Brands and Global Head of Luxury & Lifestyle Brand Development, respectively.

Hilton is clearly trying to make up for the head start that Starwood and other competitors have on the lifestyle front - knitting “lifestyle” and “luxury” under the same umbrella.  And the questions for luxury marketers seems to be: Can lifestyle be positioned as luxury? Can high design and a “cool” environment drive up rates? W Hotels seems to have done it – but that might have been a unique situation.

On that subject Barry Sternlicht, who created Starwood Hotels and who now runs (unrelated) Starwood Capital, said at the conference, “W Hotels was never meant to be a luxury product.” But because its lifestyle approach to lodging clicked with the right demographic, it enjoys rates right up there with much more lavish brands like Ritz-Carlton and Four Seasons.

Sternlicht cautioned , however,  that “one problem with being that ‘edgy’ is that really hip people are always changing hotels to stay in the hottest ones.” He said that in his tenure at Starwood, “Turning around Westin was more important financially than creating W.”

Here is a look at some of the buzz behind the buzz at NYU that will directly affect the luxury lodging marketplace.

• The U.S. is quickly moving from being the center of the hospitality world. It’s not news, but the pace seems to be accelerating for all industry activity – especially at the higher end -- financing, development and even customers seem to be emerging from China, India, Russia, the Middle East and other markets.
• Hoteliers are extremely concerned about the state of the U.S. airline industry – cutting capacity, alienating travelers, etc.  While lodging has held up in the face of the crisis, some worry about how long that can be sustained.

• Commenting on the U.S. economy, Sternlicht saw storm clouds, saying, ”The U.S. consumer has hit a wall.”  He said discounting will be coming, and is already happening in Las Vegas.  (This was the first time in years that the word discounting has been heard at this event.)
• Gerald Lawless, CEO for Dubai-based Jumeirah Hotels, commenting on the tendency to label hotels as having six stars or more, said, “We never used 7 Stars for our hotels - the press did that.”
• Thomas Storey, president of Fairmont Hotels, said that a high level of luxury is difficult in a hotel bigger than 175 rooms, Lawless disagreed, saying, “It depends on the environment. We have 600-room hotels with the highest level of service.”
• And it could be that the “amenity creep” – much derided in the 1980’s -- will be a target again as profits weaken. Storey said that, “You can’t constantly be layering on services. We will be ranking all amenities and services – importance in J.D. Powers, ranking etc – and start eliminating those amenities and services from the bottom.” categories so luxury will be what we sell.”
• And on the subject of whether being green will drive rates, Jim Alderman, executive vice president of Starwood Capital Group, said this: “Our 1 hotels will be more about luxury than about being green."