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Crisis forces Hilton and InterContinental hotels in Vienna to give up their five stars
News 17 September 2009
Starwood Hotels & Resorts Worldwide, the US owner of luxury brands including St Regis and W Hotels, has announced it will let some of its properties reduce their level of service - and number of stars - until the industry begins to recover.
Maintaining stars requires enormous capital investment," says Stephen Bollenbach, who retired as Hilton's chief executive officer in 2007. "Ratings aren't based on making good returns on your investment."
Luxury-hotel operators have struggled to attract customers as the recession deters holidaymakers and forces companies to slash their travel budgets. That should mean lower rates for high-end business and holiday makers. It may also mean the loss of some amenities, such as welcome gifts, flowers in rooms, free newspapers or 24-hour room service. Hotel operators need to reduce services to conserve cash.
Occupancy rates for luxury hotels worldwide fell to 57 per cent in the year to July, compared with 71 per cent in the same period a year earlier - a bigger drop than for other types of accommodation, according to US-based Smith Travel Research.
Hilton abandoned the five-star rating for the Hilton Vienna Plaza this year and does without an official rating at another hotel in the city, says spokeswoman Claudia Wittmann. She says the company abandoned the star rating at its hotels in part because of the different standards required in each country.
InterContinental Hotels has also decided not to renew the five-star classification on its only hotel in Vienna, says spokesman Charles Yap.