As Hotels Struggle for Business, Some Guests Find an Upside
Hotel guests score bargain rates but find cutbacks with perks.
Feb. 7, 2009— -- Don Schmincke can't believe the recent deal he got at a New York hotel.
"I just stayed in Times Square at the Crowne Plaza for $250 a night -- on New Year's Eve!" says the author and speaker from Baltimore.
Schmincke and other guests are reaping the benefits of the worst downturn in the nation's $140 billion hotel industry since the travel industry's collapse in the months after the 9/11 terrorist attacks. The current recession has led Americans to put the brakes on travel -- long viewed as a key measure of Americans' confidence in their financial situation -- and led hotels to turn on vacancy signs as occupancy rates have plunged.
For those who do travel, there can be an upside: bargain rates, less-crowded hotels and rooms available at the last minute at popular hotels.
Many also are enjoying improved service and special treatment, such as free upgrades to suites or club floors, as hotels roll out the red carpet to try to attract and hold on to customers.
"It reminds me of the good ol' days when a frequent traveler was pampered," says Robert Cartwright, a loss-prevention manager in Exton, Pa., who stayed 60 nights in hotels last year. "I am truly enjoying the special treatment."
Cartwright says hotel staffers welcome him, remember his name and offer a "marked improvement" in service.
Hotels have largely concealed the industry's turmoil from many guests. But behind the scenes, it's not a pretty picture:
The Dow Jones U.S. hotels index, which measures the stock performance of hotels and other lodging businesses, fell 56 percent last year -- a steeper drop than the Dow Jones U.S. index, which dropped 39 percent.
"It was almost like someone turned off a spigot on Sept. 1," says Jeff Higley, editorial director of HotelNewsNow.com, an online trade publication.
"Travel was going full swing before a September slowdown hit, followed by a dramatic drop in hotel occupancy in October and November."