(Repeats story sent Monday, Sept. 21)
* Says rate weakness to persist through 2010
* “Appetite for luxury as strong as ever”- president
* Group bookings starting to resurface
* Hotel employment won’t climb to pre-recession levels
By Deepa Seetharaman
NEW YORK, Sept 21 (Reuters) - Room rates at luxury hotels will remain weak through 2010, but group bookings have started to perk up, a sign that economic conditions are turning around, the president of the Ritz Carlton hotel chain said on Monday.
Business from conferences, media organizations and sports teams are stacking up, and they're booking rooms at rates slightly higher than today's current prices, said Simon Cooper, who is also chief operating officer of the Ritz Carlton, one of Marriott International's MAR.N luxury brands.
Still, Cooper said pricing weakness in this segment is unlikely to recover to mid-2008 levels this year and may persist through 2010.
“The appetite for luxury is as strong as ever, although at a lower price than it would have been a year ago,” he said, speaking on the sidelines of a New York travel conference.
Top-end hotels like Ritz Carlton’s have had to cut rates this year to lure vacationers as corporate demand shrinks. Revenue at Marriott’s 98 luxury hotels fell 19 percent in the second quarter. Seventy of those hotels are Ritz Carltons.
Business bookings fell sharply last year after Lehman Brothers Holdings' LEHMQ.PK bankruptcy and the bailout of many U.S. financial giants. The crisis sparked a wave of cancellations at Ritz Carlton hotels last year, a time Cooper calls "pretty challenging."
Luxury hotels have also contended with the so-called "AIG effect." Insurer American International Group's AIG.N was widely criticized last year when it flew top executives to a resort after receiving an $85 billion government bailout.
But the “vitriol” of that criticism has since died down, Cooper said, and more businesses are starting to realize that the Ritz Carlton can offer a far more productive environment for business meetings than elsewhere.
The Ritz Carlton has contended with the fall-off in corporate revenue by cutting costs “back of house.”
Quality control duties are now performed by four regional teams, instead of employees in-house. Accounting has been moved to Marriott’s business center.
Cooper said hotel employment is unlikely to match pre-recession levels any time soon.
He added that the recession has helped hotels operate more efficiently and many of these changes will linger long after the recession fades.
“We’ve learned to operate lean,” he said, adding “I’m more optimistic now than I was a month ago.”
(Reporting by Deepa Seetharaman; Editing by Gary Hill)
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