Marriott's president Arne Sorenson commented that extravagant hotels (very expensive and in far away places on islands in the Caribbean, for example) will have a tougher time recovering their business than other luxury brands, such asd Ritz Carlton.
His comments were made to Reuters.
Not sure its over the top, perhaps just a little more direct than folks are used to hearing from top executives. I almost think its refreshing to hear someone in his position put it out there without the normal amount of sugar coating.
Thinks are a little more open these days, I find upgrades are readily available on planes, rentals and hotels. Only the ultra rich are still spending like there is no tomorrow, while the rest of the world seems to be pulling back. Still lots of uncertainty in the world economic situation and lets face it, trips to far off lands are great but even using points/air miles they are not cheap.
For example, I'd love to take a trip to the USVI or Aruba but heading to the NC Outer Banks will be just as much fun, cost me 20% as much and I can take the entire family with me (parents/inlaws included). Its not the same level of service, etc but its a great family vacation none the less :)
"Fitch Ratings said the Renaissance Mayflower Hotel in Washington D.C., which Marriott manages, indicated last year that it is no longer able to meet debt service.
Chief Financial Officer Carl Berquist said roughly 1 percent to 1.5 percent of the company's hotels, or properties representing 5,000 rooms, leave the brand every year."
A signature property like the Renaissance Mayflower is likely the tip of the iceberg. What the article does not disclose is Marriott's plan to manage through the financial crisis.
To Marriott's credit, last year marketing came through with very aggressive and innovative promotions. As the 2009 2nd Qtr Earnings Report made evident, combining the Global Rate Break with Elite Rollover Nights plus Double Nights was extremely effective. Luckily, we're early in 2010.
SUGGESTION: To drive occupancy why not develop an Elite Pointsavers Plus promotion that awards Bonus EQN for every night redeemed combined with a paid night? In other words, have a fire sale on room rates combine it with pointsavers and a bonus tied to Elite tier.
Untrained associates combined with low occupancy is a belly-up combination. To maximize the win-win, hotels will have to deliver upon Elite expectations. To make that happen, run a contest among the associates in tandem with the promotion with a pre-requisite of xx hours of training.
That approach increases the likelihood of success and drive occupancy while raising levels of associate and guest engagement.