The Economic Crisis and Niche Hotels

Luxury Hotels Are Feeling Economy's Pinch:
http://www.nytimes.com/2009/01/27/business/27hotels.html

Hotel revenue is down sharply. Big new projects, planned in the boom days, are either sitting unfinished or left on the drawing boards. And some high-end hotel owners now face an unhappy situation — how much can they cut prices to fill their rooms before they damage their hotels’ luxury cachet?

“I don’t think anybody realized the switch was going to be turned off so quickly,” said Lisa Grossberg, the general manager of the Buckingham Hotel in Midtown Manhattan. “We saw people being more rate-conscious; we saw the renegotiations of corporate contracts as companies tightened their belts in the fall. But then in the middle of December, everything just about stopped.”

Hotel giants seek refuge in niches:
http://www.reuters.com/article/lifestyleMolt/idUSTRE50D06I20090114?sp=true

Hotel revenues have fallen sharply since last October and shares in hotel groups in Europe fell by more than 30 percent in 2008 as investors anticipated pressure on earnings this year.

Nonetheless global giants from InterContinental -- the world's largest hotel group -- to Marriott and Starwood are launching boutique brands in Europe, with others set to follow as they face the biggest industry downturn in a generation.