Luxury Hotel Chains Dropping Five-Star Ratings to Conserve Cash

[milehighj]

Luxury Hotel Chains Dropping Five-Star Ratings to Conserve Cash

By Nadja Brandt

Aug. 25 (Bloomberg) -- Luxury-hotel chains, the biggest losers in the lodging industry’s decline, are giving up some of their hard-won stars to save money.

Starwood Hotels & Resorts Worldwide Inc., the U.S. owner of luxury brands including St. Regis and W Hotels, will let some of its properties reduce their level of service -- and number of stars -- until the industry begins to recover, spokeswoman K.C. Kavanagh said. Hilton Hotels Corp. and InterContinental Hotels Group Plc have already cut the ratings for some locations.

“Maintaining stars requires enormous capital investment,” said Stephen Bollenbach, who retired as Hilton’s chief executive officer when Blackstone Group LP bought the company in 2007. “Ratings aren’t based on making good returns on your investment.”

Luxury-hotel operators have struggled to attract customers as the recession deters vacationers and forces companies to slash their travel budgets. That should mean lower rates for high-end business and vacation travelers. It may also mean the loss of some amenities, such as welcome gifts, flowers in your room, complimentary newspapers or 24-hour room service.

http://www.bloomberg.com/apps/news?p...=a0Jx2BsWXajo#

[UMD]

This is sad because once you go low on quality, your brand will forever stay there. I hope not too many properties will do that. Instead of lowering down the quality of the brand like St. Regis, why don't they just move the said properties down to a lower tier brand such as to The Luxury Collections or to Sheraton or Le Meridien?

[benlee]

Very bad move. Cutting corners bring their service/product quality level down and drive away premium customers and one the other hand, there's no way with their inherent overhead can they compete with the lower cost structures of chains like holiday inns to attract the budget conscious.

[HUGE AL]

Starwood Hotels & Resorts Worldwide Inc., the U.S. owner of luxury brands including St. Regis and W Hotels, will let some of its properties reduce their level of service -- and number of stars -- until the industry begins to recover, spokeswoman K.C. Kavanagh said.

Haven't they been doing this over the past 12 months?! Don't know about the rest of you, but I've seen a significant drop in service since then. For such a leader, it's shocking to see SPG making the moves they have been lately.

I'm telling you: HYATT! They've decided to take the opposite approach. Plus, they are much leaner (because of the settlements they've had to go through [fortuitous timing]) and can make changes much faster.

[Gunnar Smithsen]

*cough*ACCOR*cough*

[KeithMEL]

As I posted on TOF, it's rather ironic that they have a prominent pic of the W Lexington Ave in the article. I'd hate to think what the service would be like if they removed a star from that dump. In fact I'm not sure I'd notice a difference if they turned it into the aLoft Lexington Ave; the experience there would probably become better as expectations are lowered.

[HUGE AL]

Perhaps the W Lexington is the new standard for their holdings.

[leo]

Isn't this exercise just putting on paper what has been going on over the past year?

[KeithMEL]

Perhaps the W Lexington is the new standard for their holdings.

God forbid.

[StarG]

This is sad because once you go low on quality, your brand will forever stay there. I hope not too many properties will do that. Instead of lowering down the quality of the brand like St. Regis, why don't they just move the said properties down to a lower tier brand such as to The Luxury Collections or to Sheraton or Le Meridien?

Agreed, that would be a better solution.

[leo]

This is sad because once you go low on quality, your brand will forever stay there. I hope not too many properties will do that. Instead of lowering down the quality of the brand like St. Regis, why don't they just move the said properties down to a lower tier brand such as to The Luxury Collections or to Sheraton or Le Meridien?

Rebranding the propert(ies) concerned will be another major expenditure. Just think of all the towels, sheets, stationery, cutleries, crockeries, uniforms, etc that are currently branded... I suppose you get what I mean

[MAN Flyer]

I'm telling you: HYATT! They've decided to take the opposite approach. Plus, they are much leaner (because of the settlements they've had to go through [fortuitous timing]) and can make changes much faster.

Sadly not enough of them in the right locations for some of us. Although I am typing this from the Erawan in Bangkok...

In fairness, I haven't seen any decline in SPG's treatment of Plats at the properties themselves, although I am tending to stay at the same places where they know me. It's just this bizarre and worrying Ambassador programme they've launched and the affect it seems to have had on Platinum Concierge.

[HUGE AL]

Although I am typing this from the Erawan in Bangkok...

hahahaha How is that hotel compared to the SGS?

[MAN Flyer]

hahahaha How is that hotel compared to the SGS?

I'm off to the SGS in minute, for a few hours at least.

This is a very nice Hotel, but the SGS is my darling in Bangkok I'm afraid.

[jhm]

The i.sawan spa cottages at the Erawan are awesome! It's like a hotel within a hotel.