The International Herald Tribune, a paper wholly owned by the New York Times, has a Sunday headline “New battle cry of U.S. consumers: ‘Get the cheap stuff!'”.
The article opens with “Stung by rising gasoline and food prices, Americans are finding creative ways to cut costs on routine items like groceries and clothing, forcing retailers, restaurants and manufacturers to decode the tastes of a suddenly thrifty public. Spending data and interviews around the country show that middle- and working-class consumers are starting to switch from name brands to cheaper alternatives, to eat in instead of dining out and to fly at unusual hours to shave dollars off airfares.” Oddly, it does not mention hotels but the implications for the hospitality industry are equally if not more important.
The last downturn in the aftermath of 9/11 had a similar backlash with consumers staying shy of the then fast rising boutique names and even big brands only to see a strong revival for the luxe names around 2005. History is likely to repeat itself but for the short term things could be looking up for select service nationwide.