With average occupancy rates at hotels expected to hover around 55% for 2009, the hospitality industry is coming out of a dismal year, with luxury properties taking an especially hard hit. In August 2009, occupancy rates in luxury hotels in the U.S. showed a 9.1% drop compared to August 2008 figures, and average daily rates were down by 19.5%, according to figures from Smith Travel Research, a Nashville (Tenn.)-based provider of travel industry data.
Yet hotelier Jaume Tàpies, international president of Relais & Châteaux, has no plans to back away from luxury or reinvent his brand based on short-term consumer backlash. "This should all be over in a year and a half," he says. The challenge during the recession: investing in marketing and improving services to preserve reputation, the lifeblood of luxury brands.
Relais & Châteaux is a Paris-based association of 480 luxury hotels and restaurants in 56 countries, and member properties include such destinations as Glenapp Castle in Ayrshire, Scotland, and Jean Georges in New York City. The down travel industry made it difficult for some to maintain first-class standards—the organization sacked more members than it will gain this year. Tapping Social Media Tàpies' strategy for stimulating business for struggling high-end hotels? "We have communicated more than ever with an ad campaign and social media." Relais & Châteaux increased advertising on CNN (TWX), CNBC (GE), Euro News, and France 24 this year to keep the luxury brand relevant to business travelers.
Online platforms such as chefs' Web pages on grandschefs.com emphasize the company's strength in food and appeal to consumers' growing focus on the culinary aspect of travel, as illustrated by the success of the Food Network, which recorded its highest-rated, most-watched month in August.
This year, the company also invested in improving service by setting up call centers in each country rather than having a large, centralized system, and training staff to provide travel advice to match local habits. "Americans don't book like Germans and Brits," he says. The change helped increase the percentage of call center inquiries that become reservations to 30%.
Tough Standards for Membership Expecting demand to pick up, Tàpies is exploring expansion into U.S. cities, a new direction for the group, which has its roots in rural properties. The rationale: Cost- and time-conscious consumers are starting to prefer short-haul travel over long trips.
He recently traveled to New York City and plans to go to Los Angeles, Boston, and Chicago to invite one property from each location to join the Relais & Châteaux association in the next year. The search has been more difficult than he expected. To be considered, hotels, and restaurants must meet Relais & Chateaux's tough standards for membership and also retain a strong sense of the city. "When you're in a place, you should recognize the place, the taste, the smell," says Tàpies. "There are some extraordinary cities, but it is so difficult to find this."