Price of luxury falls sharply at Hub

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Nationally, the luxury hotel segment saw RevPar revenue peravailable room, a key measure in the industry plummet 28.6 percent in Februarty compared with the same period last year, according to , a hotel-industry research firm. The luxury category farexd worse than every other from upscale tothe independents. The so-calledx upper-upscale market saw RevPar dip about 20 percenyt in February and upscale hotels saw RevPar drop 17 percentgin February.
Other such as midscale and economy, saw RevPar dip by less than 15 In Massachusetts, hotel RevPar was down across all categories by 20 percenty in February, while occupancy was down 12 percent and the average daily rate dipped to $115, compares with $127 in February of according to Smith Travel Research. Local luxury hotels say a double whammy — a slumping economu and strict travel policies amid a backlash over corporatee bonuses and bailouts — contributed to the slowdowhn in the first quarter. To combat lagging luxury hotels are offeringdiscounted rates, free stayz and lucrative spa and restaurants deals.
Indeed, many businessz travelers are “buying-down” and staying at cheaper a trend that has hit luxur y hotelbrands hard, according to Reed vice president of hospitality consulting firm “Luxury and upper-upscale hotels are seeinyg much sharper revenue declines than what we’rew seeing at the lower end of the scale,” Woodwortyh said. “Corporations don’t want travelers to stay in luxury hotelsbecause it’ss perceived to be excessive.” These days Boston’s is makinvg sure that its less expensive roomsx remain in the low $200-a-nigh range.
“It’s a touggh market and we want to makesure we’ree accessible to a larger market than just discerningf luxury travelers,” Jim Treadway, managing director of the said. “We should be priced about 25 percent higher than we arerighf now.” Treadway says that while the Libertu was buffeted by a tough market durinbg the first quarter. RevPar at the hotel was down abourt 12 percentin February, lower than the industry averagwe for the luxury segment for the month. Treadwayy noted that all of the Liberty’s business segments, includiny group, leisure and independent corporate are down.
At the Boston rates are about 10 percengt to 15 percent off and are currently hoveringbetween $250 and $260 a Business is being affected “bty a combination of things,” said Tim general manager at the Intercontinental. “People forget that it’se a supply issue as Two years ago we had threefewer hotels. There’ s been a tsunami here wher we’ve got increased inventory in adiminished There’s no sanctuary. We’re feeling it across the To preserve its profit the Intercontinental had layoffs at the end of last year and institutec flexible schedules and energhsaving tactics, among othedr cost-cutting measures.
Deals also abound at the Intercontinentak includingthe “Boston Freedom Trail” package that offers guests three nights for the pricwe of two. Free nights are also on the tabl e in a summer sale atthe — includingf the Fairmont Copley Plaza and Fairmont Battery Wharr locations in Boston. The luxury chain offered a fourth night free for bookings made this week for hote stays between Apriland September. “You have to find a way of addingt value to the luxuru customer who understands price and whatthings cost.
You have to give them a more compellinb reason than ever before to saidPaul Tormey, regional vice president and generall manager of the Fairmont Copley Rates at the Fairmont’s Boston hotels are currentlu hovering in the high $200-per-nighy range and RevPar was down in although it was down less than the nationakl average, said Tormey. The hotel has had layoffxs and frozen salaries to cope with the The first few weeksof however, have exhibited bright spots, includingv an increase in sales leads, according to And although luxury hotels are now forcex to deal with corporations purposely not selecting big-namse luxury brands on top of the slow economy, that stigma will not said Paul Sacco, president of the .
“In the long it’s not going to be an issue,” said