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by Morton D. Rosenbaum | May 01, 2005

When Ellen Adelman, director of sales for Shutters on the Beach and Casa Del Mar in Santa Monica, Calif., speaks of January 2005, there’s a hint of wonder in her voice, as if she’s recalling the landing of a strange and beautiful UFO. “It was a January, which is always so slow,” she notes. “But this January was the strongest month we have ever had. Something has to be going on here.”
    The “something” Adelman alludes to is the much-touted rebound of the luxury travel market, perhaps one of the strongest, most verifiable though, some might add, most inflated claims in the industry this year. To paraphrase a slew of recent reports, the luxury market, after years of being trampled on by economic hardship and the new asceticism, has risen again. As of 12 months ago, high-end hotels are booking more business, and at higher rates, than they have since all of this century’s early devastations slammed the travel market.
    Meetings have ramped up as well. After a series of demoralizing plunges in high-end group business, 2004 marked a significant increase in RevPAR (revenue per available room) as well as occupancy for the sector, according to a report from the New York City-based Hospitality & Leisure Practice of consulting magnate PricewaterhouseCoopers. Last year, the luxury market saw a 7.3 percent increase in RevPAR and a 7.2 percent jump in sold rooms, with still more increases expected for this year and beyond. 
    While hoteliers are cheering this welcome news, rising demand brings with it some obvious challenges for planners, particularly in the form of higher room rates, as well as lower availability.

Mary Jo Blythe of MaterPlan


“Short-term availability
definitely is shrinking.
Even six to nine months
out would be tough.”
Mary Jo Blythe, MasterPlan

 

The rebound bandwagon
Business is “absolutely” back, proclaims Dieter Huckestein, former executive vice president of Hilton Hotels Corp. and the newly minted chairman and CEO of Hilton’s rapidly proliferating luxury brand, Conrad Hotels, based in Brussels, Belgium. Announcements of Hilton’s fresh focus on Conrad began early this year, presumably in response to the shifting power of luxury. 
    “There’s such a strong, pent-up demand right now. For years, the meetings industry has been reining itself in,” says Huckestein, who points to group business as the brand’s most badly bruised sector in the aftermath of 9/11, compared with the leisure and corporate travel markets, which recovered much faster. “The last 10 months, though, have shown us one thing: You can only lock these people up for so long.”
    Not everyone, like Huckestein, depicts the 21st-century meeting attendee as a caged, luxury-starved beast, but the image looms large over most discussions of current budget ceilings.
    “After 9/11,” recalls Mary Jo Blythe, president of Clarendon Hills, Ill.-based MasterPlan and a third-party planner specializing in high-end meetings, “clients who previously had only considered five-star properties started saying, ‘How about a Westin? A Loews?’ Things got extremely conservative.” Over the past eight months, however, Blythe has seen the stigma of a five-star meeting wearing away. “There’s a sense again of, ‘We’re working hard and we’re doing well, and we want our people to feel good about this company.’”
    According to Chevy Chase, Md.-based Ritz-Carlton Hotels, recent business lends compelling testimony. “This last quarter was the best one we’ve had since 9/11,” says one representative, “and I don’t think our competitors are any different. I think it’s safe to say again that luxury is not a four-letter word.”