By Harvey Chipkin

Luxury seemed much on the minds of delegates and speakers at the 31st Annual NYU International Hospitality Industry Investment Conference, held early this month at the Waldorf-Astoria. Attendance was down about 20% (better than organizers expected) and many seemed intent on seeking silver linings.

See highlights under these topic headers:

The Dirty Word Dilemma and Will Luxury Come Back as It Was?

The Dirty Word Dilemma

• Christopher Nassetta, CEO of Hilton, conceded that "luxury is a dirty word today." But he continued, "Luxury goods and products will be in demand again because the mega-trends for that are positive. We are hoping for significant growth for the Waldorf-Astoria collection. We have a serious desire to be in luxury."
• "This is a testing time for luxury operators," said John Scott, CEO of Rosewood Hotels & Resorts. "This is when good operators earn their keep by showing how they can operate their businesses effectively. This period will show which management companies are doing a good job."

Will Luxury Come Back As It Was?

• "It will come back in a different form," said Gaymer-Jones, "with the emphasis on authenticity. Bling and over the top will be out."
• Said Scott, "There will be far fewer markets that can support a true luxury product - no more than a half dozen in the U.S. " Scott also said that there has been a turnabout on the development side of luxury where the hotel element of a mixed-use development is now the lead element. "The hotel will be used to sell residences," said Scott, "because people are not buying residences so that upfront money will not be coming in."
• "The development side is dead as we knew it;" agreed Vazifdar. "there will be much lower leverage, and less residential so it will take a long time to come back."
• And Macpherson added, "Sadly, this (the economic crisis) is something that had to happen. Hotel investment conferences like this one had become like rock concerts. We can all benefit from this by losing fly-by-night brands, and by dealing with more rational lending. It will be a better world for luxury."

Cost Cutting: Not A Dirty Word

• Homi Vazifdar, managing director of Canyon Equity, which owns luxury properties, said, "Luxury is not opulence. It's less about the physical look, which just has to be decent and not over the top. As long as you don't dilute the guest experience, you can do value engineering."
• Robert Gaymer-Jones, COO for Sofitel, said there might be relaxation of luxury brand standards for this period. He is the one who gave the following example: "We have had Hermès as a standard for our bathroom products throughout the hotel; now we might offer that brand in suites only with L'Occitane in other rooms."

On the same subject, Paul Macpherson, chief development officer for Jumeirah Hotels, said cost cutting depends on the market. "In New York, unions make it difficult to cut labor whereas in Dubai where we have had staff-guest ratios of as much as 8 to 1, it is much easier. London is somewhere in between."

And Rakesh Sarna, COO-International for Global Hyatt, said, "We have banned the use of the word cost-cutting. We might shut down rooms but won't punish loyal customers with diluted experiences. It's amazing how much cost can be squeezed out without that happening. However, at some point we have to build revenue."