Upscale hotels are hiding their cuts

The lobby of the Chancellor Hotel in San Francisco

TEXT OF STORY

Scott Jagow: Starwood Hotel chain announces fourth-quarter results today, and earnings are expected to be half of what they were a year ago. Revenue across the hospitality industry is down sharply, especially in a part of the industry that's usually unaffected by downturns: luxury hotels. From WLRN in Miami, Dan Grech explains.


Dan Grech: Revenue at luxury hotels fell in January by 24 percent compared to a year ago. More business travelers and international visitors are staying home or settling for cheaper accommodations.

Upscale hotels could fill their rooms if they slashed rates. But that could hurt their luxury cachet. So they're cutting costs in subtler ways.

Michelle Payer: Any measures that we're taking are so far in the background that the guests don't see them.

That's Michelle Payer with The Ritz-Carlton Hotel Company. She says the Ritz has trimmed its water usage and electric bills.

Payer: The guests will still see the flowers in the hotel, and they'll still see the bottled water when they walk in, they'll still have the complimentary little cookies or bites to eat in the afternoon.

Other luxury chains entice customers with freebies: free valet parking, free meals, even a free visit to the spa. These days, we could all use a massage.

In Miami, I'm Dan Grech for Marketplace.

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