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Luxury hotels - there are deals to be had

Jun 28, 2009

There are deals to be had. Hotels need you, and they need your money, and in this time of downturn, they aren't going to let rooms stand empty if they can generate some cash.

But beyond needing you, they also want you -- to enjoy your stay, to call on them to cater to your every whim, to tell them what makes you tick and lights your life.

Watch out for both this summer as you check out what's going on with checking in.

Great deals have proliferated, and that probably won't change much in the year ahead. But luxury hotels have been especially hard hit, so they're expected to keep offering reduced rates, free nights or resort credits to attract business.

"Consumers are going to find better discounts, percentage wise, by taking advantage of more upscale hotels that have to provide dramatic discounts," said Bruce Baltin, vice president for PKF Consulting, a national hospitality consulting firm.

Travelers may not have to hurry to snag deals this summer. When hotels cut their room rates by as much as 40% after the Sept. 11 terrorist attacks, prices stayed depressed, said Duane Vinson, vice president of Smith Travel Research, a hospitality research firm based in Hendersonville, Tenn.

"It took six years for hotels to recover the rate cuts from 2001," he said.

Atlanta-based PKF Hospitality Research recently called 2009 the worst year on record for the industry, thanks to an all-time low occupancy rate and this year's forecasted 17.5% decline in revenue per available room, an important performance measurement. Worse, the typical U.S. hotel's net operating income is expected to fall 37.8% in 2009 and 9.2% more in 2010.

As they compete for fewer guests, hotel operators are trying more diligently to reach customers before, during and after their stays, says David Brudney, a Carlsbad-based hospitality consultant. He expects that hotels will put greater emphasis on customer relations, particularly in the form of social media, websites and e-mail.

Websites may more easily allow guests to preset such preferences as the content of their mini bars or the delivery time of their breakfasts. E-mail marketing and social media will be keyed more to such psychographic measures as attitudes and interests.

"We're really in the business of creating experiences," Brudney said. "The ones who master the new forms of communication to deliver on those experiences are the ones who are going to be successful."

Guests can expect to be more intensely monitored for clues to what makes them happy, said Brudney, who offered himself as an example.

"I belong to AARP, but I don't want to be solicited for my hotel business for how old I am, but for who I am," Brudney said. "A lot of these hip hotels . . . are all saying they appeal to Gen X or Y. I'm saying there are a lot of hip seniors who are going to like this stuff."

To glean those attitudes more effectively, hotels may make filling out guest satisfaction surveys more attractive by offering discounts or other incentives.

The only downside of this economy may be for consumers who lust for new properties. About 48,000 fewer hotel rooms are being built this year, a 23% drop from last year, according to a recent Smith Travel Research report on new hotel construction.

Next year looks the same, or worse, given that it can take two to three years to complete an average hotel. "Financing for new-build construction is, for all intents and purposes, dead on arrival," said Donald Wise, an investment banker with Johnson Capital in Napa, Calif.

So consumers will need to be content with such recent additions as Terranea in Rancho Palos Verdes, the Shorebreak in Huntington Beach (see article, this page), the Hotel Erwin in Venice and the Hotel Maya in Long Beach.

The 305-room W Hollywood is on pace to open in December as a new type of luxury hotel -- one that's "defined by convenience, comfort and a lifestyle of ease," said Marty Collins, president and chief executive of Gatehouse Capital, one of the developers and owners of the multi-use property. Despite the dramatic changes in the economy, the hotel hasn't altered its concept or moved its opening date.

At the enormous CityCenter hotel, retail and residential development in Las Vegas, travelers can expect the December opening of the city's first Mandarin Oriental, which will include a spa with 38 "water experiences." The center's all-suite Vdara hotel is scheduled to open in October; the 4,004-room Aria Resort & Casino will take reservations for mid-December.

Farther afield, the Dorchester Group, which includes the Hotel Bel-Air, Le Meurice in Paris and the Beverly Hills Hotel, next year will add the 70-room Coworth Park, a "country house hotel" built from a stately home near Ascot, England. This year, 45 Park Lane is scheduled to open as a sister property to the nearby Dorchester in Mayfair, London.

Executives came to the Peninsula Beverly Hills to announce the Peninsula Shanghai, its ninth hotel, which is to open late this year on the historic Bund. The company will enter Europe with the Peninsula Paris in 2012.

As he spoke about the new properties, Peter Borer, director and chief operating officer of the Peninsula's owner, Hongkong & Shanghai Hotels Ltd., described a hotel that has positioned itself for the new economy. The latest concept of luxury isn't about status and indulgence, but "loyal staff, value, comfort, security and exceptional service."

Luxury hotels - there are deals to be had
Photograph by Wally Skalij / Los Angeles Times


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