Ritz-Carlton: Biggest Bargain Hunters Spend the Most
By: It's no secret that last year was a tough year for the hotel business. Companies cut back on travel. Conferences and other group meetings were canceled after executive luxury travel was stigmatized in the midst of the financial crisis.
Even though consumers were reeling from a sharp downturn in the economy and high levels of unemployment, hotel operators focused on the leisure traveler to fill up rooms.
Luxury hotel chain Ritz-Carlton was no exception. Right from the beginning of 2009, the hotel offered guests very aggressive offers.
Ritz-Carlton discovered something interesting: Guests who accepted the most aggressive deals were the same ones who tended to spend the most at the hotel, said Ritz-Carlton President and COO Simon Cooper.
"It's a very interesting dynamic," Cooper said in an interview with CNBC. (To hear the full interview, click here.)
Deals such as "stay four nights, get one night free" offered vacationers good deals and pushed the company's occupancy rates for leisure travel rooms to above 2008 levels.
Unfortunately for vacationers, they won't see such sweet deals again this year.
"Leisure pricing is back to where it was in '08," Cooper said.
The good news for Ritz-Carlton is that higher-margin group business is coming back, according to Cooper.
"Groups are coming back now, definitely are," he said. "The stigma of luxury is off."
However, pricing remains a "challenge," he said. Prices, on average, are still below 2007 levels. The company is once again offering "aggressive" prices and being "flexible" with groups who are looking to book an event.
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