Monday, February 15, 2010

Luxury Hotel Deals in Orlando

How much does the average room cost in a high-end Orlando hotel these days?

Three-hundred dollars a night? Try again. Two-hundred dollars? Still too high.

The average daily price among the top 15 percent of hotels in the Orlando market last year: $138. The cost of a room in this "luxury price" category was down 12.3 percent from a year earlier, according to Smith Travel Research, which tracks hotels nationwide. The average room rate for the entire market was down about the same amount, 12.2 percent, to $93 a night.

The sharp price drop is an indication that the recession has reached all the way to the top tier of Orlando's hospitality business. It's also an opportunity for visitors to Orlando who want a taste of the good life while traveling on a budget.

"It's a buyers' market for the consumer," said Richard Maladecki, president of the Central Florida Hotel & Lodging Association. "There are wonderful deals to enjoy with our Central Florida four-star hotels."

The sour economy has pushed hotel prices down nationwide — they fell 8.8 percent overall and 13.1 percent in the luxury-price category last year. The Orlando market also added several luxury properties in 2009, including the Waldorf Astoria Orlando, the Hilton Orlando Convention Center, and the Westin Lake Mary Orlando North.

"With the new additions, many properties are playing very aggressively," said Karen Galles, director of lodging for "As far as availability, it's plentiful."

But don't bank on concierge service for $138 a night: You're likely not going to get a room for that price at the Ritz-Carlton Orlando Grande Lakes or Loews Portofino Bay. A search last week of three dates — one weekday, one weekend and a peak day during Spring Break — found that the area's swankiest hotels are still charging a few hundred bucks a night, at least on their Web sites.

For one thing, in Central Florida, the term "luxury price" comprises the top 15 percent of Orlando's hotel market based on price, not services or amenities. So in addition to the Ritz, the Waldorf and downtown Orlando's Grand Bohemian, the category includes such properties as the Embassy Suites in Altamonte Springs, the Hampton Inn near Orlando International Airport, and the kid-friendly Nickelodeon Suites Resort.

Also, the average daily rate compiled by Smith Travel is the amount hotels are paid for their rooms. If some rooms are sold in bulk at steep discounts to online travel sites or other intermediaries that then mark up the price — and many rooms are —the original, lower-dollar figure is the one that figures in the average.

High-end properties are particularly sensitive to keeping their rates — and their luxury image — intact, even during a recession or travel slump, said Scott Smith, a lodging instructor at the University of Central Florida's Rosen College of Hospitality Management.

"If you're a GM [general manager] of a luxury hotel, you make your living off the higher rate," Smith said. "The last thing you want to do — if you're thinking long term — is to offer discounted prices to the public."

So the real eye-popping discounts at high-end hotels are often limited to travel-industry "partners" such as tour wholesalers and meeting planners. They can also obscure a low nightly rate by offering rooms as part of larger packages that include airfare or perks such as champagne or spa treatments.

Hotels such as the Peabody Orlando, the Waldorf and the Villas of Grand Cypress are among those offering attractive package deals when travelers book the airfare with their hotel stays on, said Galles, the Web site's lodging director.

And the discounts aren't limited to last-minute bargains: The same site also has late-spring discounts, such as $93 a night in the Omni Orlando Resort at ChampionsGate, south of Walt Disney World.

"If the customer is flexible, they can really get good deals," Galles said.

Of course, what's good for the buyer is often not so good for the seller.

Revenue per available room — a key industry statistic — fell 20.8 percent last year for Orlando's luxury-price hotel segment, compared with 19.1 percent for the market overall, according to Smith Travel.

Compared with other U.S. destinations, Orlando ranked No. 32 last year for the average price of its top-tier accommodations, behind cities such as Baltimore, Md.; Scranton, Pa.; and Phoenix, Ariz. The average daily rate for the luxury-priced hotels across the nation was almost $147 a night, or about 6 percent more than Orlando's average.

Also, it is common knowledge in the industry that, while discounts fill rooms in the short term, they can hurt a hotel in the long run.

That's because consumers, as they see more and more deals for a particular type of hotel, lower their "cognitive reference price" — that is, the price they think a stay in that kind of hotel is worth, said UCF's Smith.

"The time that it takes to lower that reference price can be days or weeks," he said. "The time to raise it back up can be years."

This article was copied from The Orlando Sun Ssentinel. Written by Sara K. Clarke.


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