Rough Ride at the Ritz: Luxury Hotels on Sale

July 15, 2009 — -- Has "luxury" become a dirty word? It sure seems that way -- at least when it comes to luxury hotels.

But maybe free ironing will help.

Face it, the economy and the ensuing clampdown on business travel has hurt a lot of high-end hotels. Some are in trouble, while others are as worried as they could be. As a result, all of them seem to be offering a litany of new perks to lure your business -- like ironing.

Omni Hotels says join our loyalty program and we'll do some of the ironing for you (there goes my excuse for avoiding dress shirts and ties). Karen Crouse, a journalist in New York, says she "loves the idea of waking to a freshly pressed shirt and skirt," but notes the cost of the room trumps all: "The cheaper the better, even if I do have wrinkles in my blouse."

Yes, it's a brave new world for business travelers who used to take high-end amenities for granted, from round-the-clock room service to thick bath towels, thicker robes and that tasty little mint on the pillow. For many, all that good stuff is now off-limits and no wonder: Who wants to be the next poster child for greed?

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No CEO in his right mind wants to be a viral laughingstock by flying his private jet to a virtual palace. This new corporate cult of anti-consumption is being felt on all levels as cost-cutting bosses tell their road warriors to take it down a notch or two. Good-bye, five-star resorts, hello Motel 6!

Okay, maybe it's not that drastic -- and mind you, there's nothing wrong with a Motel 6 -- but if you're used to the Ritz, anything less is a comedown. As a result, some of the nation's grand old inns are reeling. Not all, of course -- but some are in hellishly deep trouble.

Case in point: the elegant St. Regis in Dana Point, Calif., with its glorious views of the Pacific -- not to mention rooms with marble baths, butler service, and of course, those 400 thread-count goose-down comforters. It is luxury, personified -- but as of this writing, it faces a foreclosure auction, scheduled for this week (the hotel will, however, remain open throughout the process, and beyond).

Money troubles are affecting new projects too, including the unfinished Fontainebleau Las Vegas, which filed for bankruptcy protection last month -- though developers say, they still plan to complete the $3 billion casino-hotel at some point. Has Las Vegas overbuilt? Let's put it this way: earlier this month, 65 Las Vegas area hotel-casinos were offering rooms for under $50.

And when it comes to deals and perks everyone's getting into the act. Hotels proclaim, "Stay with us and we'll give you dinner and a movie!" (Sheraton Houston Brookhollow and others) "Stay with us and get a free rental car and sunglasses!" (Hotel Renew, Honolulu)

It can get even wilder. I note that a pet lovers package at Aspen's beautiful Sky Hotel includes a free doggie toy, and the "Apres Vows" special for couples includes a free Kama Sutra kit (no, I didn't ask for details).

The ultimate perk? Discounted room rates. But is this a wise move for the most opulent accommodations? Some experts say it could be a deal with the devil.

Here's how the argument goes: dropping one's rates may help fill up empty rooms, yes. On the other hand, cutting prices could tarnish a brand, particularly a five-star brand.

You can watch this conundrum play out in a rather nasty legal situation focusing on the Four Seasons Resort Aviara, near San Diego. It seems the hotel owners are trying to ditch the management, claiming they aren't operating in a "financially efficient and cost-effective manner." By the way, in this instance, the Four Seasons is the property manager -- the resort is actually owned by another entity altogether.

I'm sure both sides want to be "financially efficient" but, at what price? Maybe financial efficiency can be achieved by dropping some amenities or cutting the price of a room from $395 a night to $295. But would it still be a Four Seasons if it costs the same as a Sheraton or Marriott? Would it still be a Four Seasons if that impeccable attention to detail you pay for just disappears? Some branding experts say, maybe -- maybe not.

Of course, every hotel is working hard at bringing in business -- and some, big and small, are going the "stay-three-nights-get-a-fourth-night-free" route -- so they don't have to "lower" room rates. And, as I mentioned, there are those perks; earlier this summer, I counted six hotels on one Web site that offered free surfing lessons with every room.

Plus some hotels still provide all the amenities they ever did -- upon request. At the Renaissance Tampa Hotel, for example, you can get all those handy shoe mitts your heart desires … but you have to ask.

So, what's the bottom line? Hotel marketing consultant David Brudney of Carlsbad, Calif., says, "I think the word 'luxury' will disappear. Perception is everything in hospitality marketing." I agree but only up to a point. Once better times return, I suspect purse strings will loosen up again as human nature reasserts itself and the lust for luxury comes roaring back.

One hopeful sign for luxury-lovers: the recent opening of a palatial hotel and spa in Rancho Palos Verdes near Los Angeles, called Terranea Resort. This grand establishment is said to be so big that it can host five weddings at one time.

Sound like a place you'd like to stay at during your next business trip? Well, here's an idea: remind the company bean counters how cheap flights are this summer and how much you're saving on airfare. Who knows? Maybe you'll convince them that "luxury" isn't such a dirty word after all.

This work is the opinion of the columnist and in no way reflects the opinion of ABC News.

Rick Seaney is one of the country's leading experts on airfare, giving interviews and analysis to news organizations, including ABC News, The New York Times, The Wall Street Journal, Reuters, The Associated Press and Bloomberg. His Web site FareCompare.com offers consumers free, new-generation software, combined with expert insider tips to find the best airline ticket deal.