Luxury Hotels Slash Prices and Stars

by Alfie FEATHERSTONE on August 28, 2009

In an effort to save money and cut staff, some luxury hotels are reducing their number of starts from five to four or even lower.  Luxury hotels and resorts have felt the sting of the global recession, as many holidaymakers looking to save money on holiday travel, or choosing not to travel at all.  Maintaining a five star rating, which is enjoyed by such hotels as Starwood Hotels and Hilton, takes a large number of staff and amenities, luxuries which many hotels are being forced to do without.

Occupancy rates in luxury hotels across the world have fallen a staggering 20 percent over the last year, with the average being only 57 percent of full capacity, which makes these hotels the hardest hit by the poor economy.  Reduced occupancy means reduced cash flow, which means amenities like 24 hour room service, welcome flowers, and complimentary newspapers may have to be sacrificed as these hotels desperately try to save money.

With hotels slashing room rates, there has never been a better time for customers looking for bargains on luxury travel.    “Most luxury hotels are facing occupancy shortfalls, they are lowering rates to entice consumers to come in. There rarely has been a better time to stay at a luxury hotel than right now,” said Jeff Higley, Vice President of Smith Travel Research.

Until the recession has cleared, customers can expect rates to continue to lower.

Thanks to Bloomberg for the above quote.  For the complete article, please visit their website.

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