As I've been saying, luxury hotels have really been hammered since the Wall Street collapse. It isn't just business and leisure-travel spending cutbacks, though those are major factors.
It's also appearances or "optics," as they say. In this day and age, there is a grave reluctance to be seen spending lavishly, or to be seen listing those $750-a-night 5-star hotel rooms on the corporate expense account.
The highest-flying of the luxury hotels have been in New York City, where business was firm till mid-September -- when it tumbled off a cliff.
There is a core principle in the luxury hotel business: Avoid discounting. If you cut your public rack rates to gin up business in bad times, you may well have a very hard time raising those rates again when good times return.
That wall is starting to crack. Meanwhile, as I have said here and elsewhere, including in the current Institutional Investor magazine, you can cut very good deals right now with luxury hotels in the U.S. and abroad. They will be only too glad to hear from you.
Now some expensive hotels in Manhattan are putting a happy face on discounting.
NYC & Company, the city’s tourism PR outfit, said today that nine luxury hotels are launching a so-called Third Night promotion. The hotels are not cutting their rates, see, but ... well, you get a third night free if you stay for two consecutive nights. The promotion runs from January 9 to February 27.
The participating hotels are: Jumeirah Essex House, Loews Regency, the London NYC, the New York Palace, the Sherry-Netherland Hotel, Trump International Hotel & Tower, the Plaza, the Waldorf Towers and the Carlyle, A Rosewood Hotel.
And by the way, the Trump International Hotel is not considered a top-luxury hotel in New York. It's generally rated as a four-star hotel. And I got that assessment from one of the anonymous inspectors for the Mobil guides.
Meanwhile, it isn't just the hotels that are willing to break the no-discount rule in the luxury racket. NYC & Company said that Saks Fifth Avenue is participating in the promotion by offering a "shopping package" at its Manhattan flagship store.
In the desperate obfuscation of distress-PR, NYC& Company says mysteriously that the Saks deal "includes an exclusive personal shopping experience in the Fifth Avenue Club, a special offer to save a percentage on any regularly priced purchases made, and complimentary coffee and dessert in Saks Fifth Avenue’s Café SFA."
I understand the free coffee and cake part, but hey: What's the percent off the purchases? Is it a secret from the rest of us? Why?