I recently blogged about how RevPAR this year may decline 13.9 percent, according to PKF Hospitality Research's Hotel Horizons report. Now PKF is saying that luxury hotels may be suffering the most. The research firm told The Transnational that it expects an 8.4 percent decline in luxury average daily rates this year and a 10 percent decline in occupancy.
The effect these big losses are having can already be seen in the luxury segment. The Greenbrier resort in White Sulphur Springs, West Virginia, for example, lost $35 million last year and filed Chapter 11 protection this March. Its worked out a plan to sell the property to Marriott Hotel Services, Inc.
Obviously the hotel industry has been hit hard at all levels, but it's not very surprising that the luxury hotels have really felt the effects. They suffer from a deadly combination of higher rates and reputations as, well, luxurious—not a good thing to be known as amongst all the criticism against the industry. Do you think luxury hotels would be doing as badly if it weren't for the so-called "AIG effect"?