Luxury hotels sees an upturn after the downturn

Isaac Mostovicz writes that hotels are rapidly recovering...

There have been reports lately of promising recovery in the luxury hotel industry. USA Today and Daily Finance tell us hotels such as the Ritz-Carlton, Four Seasons, St Regis and Starwood Hotels & Resorts Worldwide are just some of the big names seeing a boost in their revenue streams.

The Ritz-Carlton’s occupancy levels improved 10% from last year’s on average low of 60%, while Starwood’s W Hotels are seeing a 28% gain in its first quarter from key cities like New York. Across the board, luxury hotels in the US have also sold almost 17% more rooms than the same period last year and increased their occupancies by 20%. This has translated into hotels becoming more comfortable about hiring new staff. The U.S Department of Labour has the figures:

Employment rose by 45,000 in leisure and hospitality over the month. Much of this increase occurred in accommodation and food services, which added 29,000 jobs. Food services employment has risen by 84,000 over the past 4 months, while accommodation has added 18,000 jobs over the past 3 months.

This has contributed to the month’s highest employment rate since the recession. Though this is largely due to the comeback of business and leisure travellers, Barbara DeLollis of USA Today tells us there are also a number of other factors in the works. Attractive offers for instance:

“We just paid $149 per night for the W hotel in New Orleans, which made me feel pretty good,” says Joseph Frohlinger of Tenafly, N.J.

Also, there are fewer perception worries:

“A year ago, as we were in the depths of this crisis, there was a high level of paranoia about luxury travel,” van Paasschen [CEO of Starwood W Hotels) says. “That’s clearly gone away.”

In addition to this, financial service firms are offering more Wall Street deals, and business activities not only at home but also abroad have also increased. Kathleen Taylor, Four Seasons’ chief operating officer says this ‘strengthening [in] world economies are contributing to an uptick in people’s confidence in the future.’ Simon Cooper, a top executive at Ritz-Carlton confirms this with his report that the Westchester branch in N.Y. has been ‘packed with international business travelers lately’ seeing a 33% leap in revenue in comparison to last year’s figures.

These are all positive signs that the luxury hotel industry is on its way to recovering, though the general consensus seems to be that it won’t be the same as it was before the recession. Cooper tells us:

“The open bar is a little bit less open…couple of spa treatments’ and the big fruit basket in the room for every day are probably something of the past,” he says. “The excesses of two, three years ago are less prevalent today.”

Here, we see how much smarter and money-conscious luxury consumers have gotten. As seen in my previous blogs, other sectors of the luxury industry (art, fashion, watches and internet) have also been improving, albeit in an unexpected way because of new luxury consumer’s habits. One thing that is certain though: it will take some getting used to before the luxury market will become less surprised of more unexpected happenings in the future.

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