5 star hotel chains have been hard hit by the worldwide recession, some even offering their garden space as a camping space in an effort to balance the books. With luxury tourism at an all time low, Starwood Hotels & Resorts is the latest conglomerate to take drastic measures and announce that it will be downgrading some of their 5 star resorts.
“Maintaining stars requires enormous capital investment,” says Stephen Bollenbach, former Hilton CEO. He further claims that 5 star ratings do not always gurantee the best return on investment, especially during a recession.
As holidaymakers have been forced to take cheaper vacations this year and as business budgets continue to be slashed, luxury hotel chains are reporting negative year on year occupancy rates. Despite positive economic indicators in the US and much of Europe, occupancy rates for luxury hotels fell from 71 per cent in July 2008 to 57% for the same period this year. The downgrading of a 5 star resort will see savings in areas such as 24 hour room service, welcoming gifts and flowers in the rooms and complimentary newspapers, savings which will allow the hotel to charge more reasonable rates and attract a wider range of guests.