Fear of being "seen in a luxury hotel while they are perhaps
laying off thousands of people or taking advantage of state
aid" is leading to many corporate managers shunning high end hotels according to a senior executive of Hyatt Hotels. Short of taking a leaf out of Kathy Fuld's playbook, there are few options left for companies under fire for an ever-expanding definition of "corporate excess" but a direct consequence has been a thinning of revenues at higher end hostelry.
The Hyatt executive is sharply pessimistic saying that" the market for luxury hotels would remain depressed through
2010 and recover slowly in 2011". Similarly, as this article notes "the penthouse suite at the Four Seasons New York. With waterfalls on
its walls, gold-encrusted furniture, and balconies surveying Manhattan
from a perch 52 stories high at $35,000 a night" is verboten.Such negativity is not surprising but recent history (the aftermath of 9/11) offers pointers to a sharper recovery from forced austerity. Then as now customers were shunning major brands and boutiques and choosing vanilla hotels that capitalized on the sentiment against luxury by not lowering rates as rapidly as their upper crust brethren.
In the end, Luxury hotel companies now more than ever need to diverse geographically just as Bombardier, the luxury private jet manufacturer did a couple of years ago in moving away from dependence on the US corporate market. Many hotel companies are, in fact, doing just that as exemplified by these companies moving aggressively into India and the Middle East. The US, in the meanwhile, is seeing signs of life in the luxury market outside hotels – that should eventually translate into a revival for hotels as well.