Luxury hotel chains dropping five-star ratings to save money

[Liberal_in_LA]

Starwood will let some of its properties reduce their level of service - and number of stars - until the industry begins to recover. Hilton and InterContinental have already cut the ratings for some locations.

Luxury-hotel operators have struggled to attract customers as the recession deters vacationers and forces companies to slash their travel budgets. That should mean lower rates for high-end business and vacation travelers. It may also mean the loss of some amenities, such as welcome gifts, flowers in your room, complimentary newspapers or 24-hour room service.

Hotel operators need to reduce services to conserve cash. Occupancy rates for luxury hotels worldwide fell to 57 percent in the year through July from 71 percent in the same period a year earlier, a bigger drop than for other types of accommodation, according to Smith Travel Research.

http://www.hotelmarketing.com/index.php/content/article/luxury_hotel_chains_dropping_five_star_ratings_to_save_money/


US hotel industry recession enters new rate erosion phase

September 02, 2009 | Hospitality Industry

During week of June 27, the drop off entered a dangerous new phase – when compared to the same week, year over year, the national hotel average room rate began to fall more rapidly on a percentage basis than the average hotel occupancy percentage. This trend has now continued over the past eight weeks.

Reeling from a sharp falloff in corporate, group and leisure travel demand as a result of the global financial crisis, hotel occupancies have been falling and hoteliers throughout the nation have been responding by lowering room rates to retain customers and shift share from competitors.

http://www.hotelmarketing.com/index.php/content/article/us_hotel_industry_recession_enters_new_rate_erosion_phase/

[dixiegrrrrl]

1. Interesting economic barometer.

[customerserviceguy]

2. Airlines can cancel flights

Hotels can only shut down properties. The alternative is to either let people burn off their hotel points (no revenue comes in) or lower rates on rooms that will exist whether they're slept in or not.