Luxury Hotels Make Comeback

Demand for luxury hotels is ticking higher. Even though the broader hotel industry is likely to cope with depressed room rates this year, due to a combination of economic woes and an increase in capacity, the luxury sector could come back in 2010. Of course, – this sector cut rates by as much as 25 percent last year – but what's important is that the rich are looking for the good life again.

Occupancy is the real story of the luxury hotel recovery, though, with heads in beds expected to surge to as high as 59 percent, a strong gain over last year's 55 percent occupancy rate. In Europe, it could even reach 65 percent this year, with room rate recovery coming next year (at a 5 percent increase).

Bruce Siegel, director of sales and marketing at he Ritz-Carlton Naples Resorts in Florida said to Bloomberg News, "On the leisure side, we certainly are enjoying a rate premium year over year." Further, he continued, "Many guests from the U.S. Northeast with clear signs of exhaustion are arriving at our door." Overall room rates, including corporate bookings, are little changed, he said.

So, what are people looking for when they book rooms at the likes of the Ritz or the Four Seasons, often at $500 a night or more? Ocean views are a must, and guests will be paying more for rooms at the St. Regis, where butler service comes as part of the tab.