Make Yourself Comfortable

Remember that little financial crisis a few years back? Maybe you missed it, but if you noticed, and you pay attention to commercial real estate, then you know that it had a profound effect on the hotel industry. Well, maybe not profound, but definitely an effect! Companies stopped spending as much on travel and meeting accommodations, hurting many luxury hotels. These hotels, in turn, had to make themselves appear less luxurious and more commonplace. Now that's some serious rebranding.

This whole situation was a pretty serious issue, but it was only magnified by AIG. I hope you remember that. Well, if you don't, they basically went on an awesome retreat while they were receiving bailout money from the government. Oopsies?

But don't fret you business travelers, things are getting better! According to the New York Times, “upscale hotels have shed some of that “AIG effect” stigma, although vestiges of the downturn remain.”

So, nicer hotels don't have to change their names like they used to. “In 2009, you had this huge wave of hotels changing their names,” said Jeff Doane, vice president for hotel sales at Fairmont Hotels & Resorts. Luckily for those luxury hotels, things are getting better.

Business travel and luxury kind of go hand-in-hand in many cases. I've heard many stories of the glory of business travel and all expenses paid perfection. However, now the task for hoteliers is defining “acceptable luxury.”

“Individual business travelers say they now have more financial leeway when booking lodging (than in the past few years).”These people obviously want luxury, but they need the kind of luxury that isn't overtly luxurious.

I definitely think that business travel will rebound, and things will get back to the way they used to be sometime in the future. Whether that is a good thing is up to you.

However, of course, we have the credit crisis still lingering, and national budget problems and unemployment don't help matters much either. With these forces acting against the luxury hotel industry, it might be a slower recovery than expected.

This slow recovery might be the perfect opportunity for middle-of-the-road hotels, and even no-frills hotels, to slightly rebrand themselves in a way to attract these new “acceptable luxury” minded business travelers.

What do you think about luxury hotel and business travel recovery?

Source article by Martha C. White from the New York Times

#CRE #economy #finance