As hotels struggle for business, some guests find an upside

Technology consultant Michael Sommer of Jacksonville says some hotels have begun charging for toll-free calls, receiving Express Mail packages and storing luggage after checkout. Business centers in hotels "that were once free now have fees associated with them."

Sue Reiss, who lives in the Florida Keys and is a sales manager for a Texas manufacturer, says rooms at several of the "higher-end" hotels she stayed at last year needed repairs or remodeling.

Many hotels are taking pains to try to avoid such complaints.

At the Wyndham Garden Hotel in Austin, there's been no reduction in service, amenities or maintenance, says Allan Reagan, managing director for the firm that owns and operates the hotel.

"If anything," he says, "we are working even harder to improve our guest service."

The hotel has cut costs by sometimes closing its formal restaurant, freezing managers' salaries and requesting price reductions from suppliers. It also is cross-training staff, Reagan says. Agents and front-desk clerks may drive airport shuttle vans, and housekeepers may wash dishes.

"It helps us improve guest service by having more employees trained to respond to any guest need," he says.

Quick turnaround unlikely

The recession is pummeling the hotel industry, but analysts predict that the big-name chains will survive.

"I cannot think of a single major brand that is so financially weak that it cannot survive the current situation," says Rick Garlick of Maritz Research Hospitality Group, which does research for hotel companies.

He warns, however, that some individual hotels, including some that are part of major chains, may disappear.

Jeremy Glaser, senior equity analyst for Morningstar, an investment research firm, says some hotels could fall victim to the credit crunch and face foreclosure if they can't renegotiate loans written when the industry was growing at a steady rate.

Industry analysts don't foresee a quick rebound.

Joe Berger, Hilton Hotels' president for the Americas, says he expects occupancy rates to continue to deteriorate this year.

Christine Klauda, vice president of lodging research for D.K. Shifflet, a travel market research firm, predicts the industry probably will not recover until summer 2010.

"That's when people will say, 'Enough of this bad economy, we're going on vacation,' " Klauda says.

McInerney of the American Hotel & Lodging Association says the industry should be helped by the fact that it didn't build too many hotels last year, which would have added to the number of vacant rooms.

Although new construction slowed last year, many projects that had been planned before that are being completed. More hotels are opening worldwide this year and next than at any time in the past decade, according to Lodging Econometrics, which tracks hotel real estate. In the USA, more than 1,400 hotel projects are expected to be completed this year, compared with 1,330 last year.

In Las Vegas, for example, four new hotels, with a total of more than 6,000 rooms, are being built as part of the CityCenter complex between the Bellagio and Monte Carlo resorts. Three are scheduled to open this year.

Marks, the industry analyst at JMP, says the increase in rooms available this year will add to the pressure on hotels to cut rates.

Guests aren't complaining.

Bill Teater of Mount Vernon, Ohio, says that "everyone" — from budget to luxury hotels — "is willing to deal on rates" for frequent guests.

"Some might say, 'Well, you could do that all along on Priceline.com,' but you do not have to go to Priceline," says Teater, a consultant who stayed 204 nights in hotels last year. "You can go to the hotel and work it out."

Linda Curran, a consultant in Palm Springs, Calif., booked a $45-a-night rate at Hilton's website for a mid-December stay at the Las Vegas Hilton.

"This is a top-notch hotel," she says. "Incredible."

TELL US: What changes have you noticed during your hotel stays?

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