NYC’s Luxe Hotels Forced To Cut Rates

NEW YORK— Significant drops in occupancy this summer are forcing the citys top luxury hotels to cut prices for the first time since the Gulf War, after months of trying to avoid lowering rates, according to a report today in Crains New York Business. The price cuts— whether termed promotional pricing or summer specials— are the result of a sagging economy and sharp cuts in corporate travel. The strong dollar is also making matters worse, causing foreign visitors— key customers for these spots— to book for fewer days and trade down from $1,600 suites to $600 standard rooms, if they are continuing to stay at top places at all, the report said. Theres also more inventory, with 2,800 new rooms added last year, which has increased competition for a shrinking number of guests. Among those cutting prices is the St. Regis at Fifth Avenue and East 55th Street. Its rooms are being sold for $390 per night, almost half the hotels record-setting average of $714 last year, noted Crains. The lowest advertised price for years had been $550. Others the Crains report cited include Hôtel Plaza Athenee on the Upper East Side, which is offering rooms for $290 this week that would normally go for $310 as a rockbottom summer price, and $480 in the peak fall season; and The Regency on Park Avenue, which is extending its published summer rate of $295 through September and quietly selling those same rooms for 30% less via discounter site Quickbook.com. And the Plaza on Fifth Avenue recently sent out e-mails offering rooms for $175, its lowest price in years. Occupancy dropped to 57.4% for top-priced hotels last month, down 19.4% from the previous July, according to preliminary results from PKF Consulting. According to PricewaterhouseCoopers, average daily room rates for luxury hotels dropped 8.2% in the second quarter, to $311.61, compared with drops of half that level for cheaper hotels.