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.

Special Interest  highlights  for Luxury Cruise marketers -

• The more expensive types of cruises tend to host more repeaters; for example, 77% of Destination, Luxury and Premium cruisers have sailed more than once. Contemporary lines attract the largest share of first timers (40 %.)
• Cruisers agree that cruise vacations are a good way to sample destinations they may wish to visit again (80%). The more experienced/seasoned Destinations and Luxury cruisers are most likely to have returned to a port for a non-cruise vacation and are more likely to add on a couple of days (43% -- 2 days) in the embarkation/debarkation port city as well.
• Cruisers spend considerably more (almost 50%) on vacations than non-cruise vacationers on their trips ($1,770 vs. $1,200).  By cruise type, passengers on Luxury Lines ($3,650) spend the most, followed by the Destination/Specialty/Niche ($2,940), Premium ($2,180), and Contemporary ($1,720).

Last week we posted key highlights of PhoCusWright’s just released Travel Agency Distribution Landscape Report on our home page. Today, after a more in-depth review, we move on with selected insights and data that offer significant encouragement to all who have a stake in the upside of the agency channel.

(Please note that the Study does not cover the luxury travel market or luxury bookings. It does, however, provide a vital context for suppliers, agents, and  tourism authorities everywhere. I could not imagine any of us doubting  that the general health of the broader agency business has a big bearing on luxury distribution.)

• Traditional travel agencies ( excluding online travel agencies) accounted for almost $110 billion in gross travel sales in the U.S, or 40% of the $273 billion travel market in 2006. Travel agents’  total sales volume is expected to decline incrementally to $104 billion by 2009, when agents will account for 33% of all travel sales –with air being the major culprit. At the same time, the research suggests that the migration of online travelers away from traditional retail agencies has largely stopped, and may even have reversed itself, however slightly.  -PhoCus Wright Consumer Trends Report
• How many individual sellers of travel in the U.S.? See the chart below, while noting that the largest 65 mega-agencies account for a stunning 47% of all travel agency sales, which leaves another 23,000-plus agencies to carry the rest, resulting in a very fragmented mix of small, primarily leisure-focused agencies?
• “Facing significant upheaval in the industry, many in the agency community have responded strategically, tactically, and –most of all—aggressively to adapt, survive, and succeed” -Report editor Douglas Quinby
• While 72% of all agent sales are booked via GDSs, agents are increasingly booking more on the Web at the expense of the GDS.  Bookings by travel agents on a web site or electronic platform that does not involve one of the four major GDS companies will grow from 16% of all agency bookings in 2006 to 21% in 2009.

   Ron Kurtz, a principal with The American Affluence Research Center and a veteran of the luxury cruise industry, has some assertive things to say about all this measuring. He also shares the results of his latest survey of how the affluent plan to behave in the next year.

Who’s Affluent Anyway?

   “People have different agendas for why they push certain definitions of the affluent,” says Kurtz. “Some want to define on the basis of income, others on net worth and still others on investable assets.”

    Kurtz comes down squarely in the camp of net worth, believing “it’s a reflection of cumulative years of income and spending.” He notes that, “Income can be subject to substantial swings. We are now seeing the problems with defining affluence on the basis of income as some people on the fringes are really getting hurt; people with solid net worth are weathering the storm better.”

     “I believe that affluence is by definition a small segment of the population, asserts Kurtz; “I don’t believe in the concept of mass affluence and think that we should be selective. That’s why I chose the top 10 percent as being reasonably selective – and that is where you find the largest concentration of wealth. People earning $100,000 to $150,000 a year are not affluent.”

How the Downturn Is Affecting the Outlook of the Affluent on Travel

    Kurtz recently completed his  spring 2008 survey . As always, he asked 467 subjects what their outlook is for the next 12 months as far as business conditions, the stock market, their own household income.