Almost every A-list star in Los Angeles has a little bit of Marie Antoinette inside. Put another way, recessions and spending cutbacks are not a concept they are familiar with. Which is why its a surprise when you read in the Wall Street Journal that luxury hotels in Los Angeles have begun “making concessions to hard times”.

High-end hotels saw a decrease in occupancy to about 61% from about 74%, and a nearly 20% drop in revenue per available room, a key industry measure, during the first week of December, according to hotel industry watcher Smith Travel Research.

Article cites the newly opened SLS hotel, which splurged $700k on a star-studded opening party attended by the likes of LA Mayor Antonio Villaraigosa, Paris Hilton, and Hilary Duff.

The hotel is now offering 50% off for 2 nights and $50 off on spa treatments with a meal at the hotel’s restaurant. Apparently this isn’t because the Hollywood stars suddenly realized the virtues of saving money, but because of the possible lack of star-studded galas and events which are held at these posh hotels.

Whether the phalanx of luxury hotels just opening their door here survive will depend on Hollywood’s appetite for red-carpet events. Established Beverly Hills hotels say they have locked up the lion’s share of events planned for the January-February Hollywood awards season. Mehdi Eftekari, general manager of the Beverly Hills Four Seasons, says Hollywood events will account for 70% of the hotel’s revenue in the next two months.

And in a sure sign that things aren’t about to go back to normal, the travel and tourism industry’s leaders are signalling that its time to look at other sorces of revenue. A summit of 39 travel organizations was held in the new Capitol Visitor Center in Washington DC on Dec 16, organized by the NTA (www.ntaonline.com/), ostensibly to present a united front and come up with joint recommendations for the Obama transition team officials.

But in addition to spotlighting travel and tourism issues for the incoming Administration, the summit also drummed up long-term recommendations for the industry. These plans won’t be made public until after all the concerned organizations have got approval from their governing bodies, but according to Lisa Simon, President of the NTA, there’s going to be an increased focus on specialty tourism and new sectors.

In an interview with Travel Agent, Simon said that the NTA would continue to work with other industry groups and noted the NTA’s new alliances with the World Religious Travel Association and the International Gay and Lesbian Travel Association.

Both aforementioned groups, along with other groups like Sustainable Travel International and Voluntourism.org, were represented at the DC Summit. Simon added that many of its members are “are diversifying their business models including adding new programs and destinations.”

Posted on January 1st, 2009 by PLing
Filed under: Hotels, Los Angeles, Travel News