Luxury Hotels Lift Rates on Demand for Butlers, Views
Hotel occupancy rates are forecast to rebound this year in the U.S. and Europe. Room prices may follow in 2011, according to analysts including Patrick Scholes at FBR Capital Markets & Co. Some luxury hotels have already been able to lift rates as demand for $600 rooms, butler service and poolside cabanas recovers in cities such as Miami, New York and London.
Julian Saipe is finally taking his family on the dream vacation he put off amid last year’s recession. Apparently, so are plenty of other people.
Saipe was surprised to find the Oceana boutique hotel in Santa Monica, California, felt no need to negotiate a lower price. “I tried to do a deal and they said no,” said Saipe, 41, managing director of Zafferano, a corporate party catering business in London. “It seems really busy.”
“Luxury hotels, especially, have some ability to raise prices again because they were hit the most last year,” Scholes said. “They are the ones that cut prices the most -- as much as 25 percent.”
Oceana, which boasts sea views and complimentary beach cruiser bikes for guests, has had higher revenue in the past two months compared with a year earlier as a result of boosting occupancy in slower periods and raising room rates in times of high demand, said Kate Jerkens, vice president of sales and marketing at owner JRK Hotel Group. Regular room rates for July currently start at about $399 a night.
The overall U.S. hotel occupancy rate may jump to as much as 59 percent this year from 55 percent in 2009, said Arlington, Virginia-based Scholes. Room prices may then rise next year for the first time since the summer of 2008, by an average of 4 percent to about $98, he said.
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Source - BusinessWeek
