Thrift Takes Hold, Rich Take Cover
Conspicuous excess starts to seem, well, excessive.
As a result, they're scaling back expenditures, canceling conferences, and generally demanding their employees adopt a lower profile in the T&E (travel and entertainment) department.
Goldman Sachs (GS) recently announced its business travelers would no longer be put up at the Ritz Carlton. BB&T (BBT), a recipient of $3.1 billion in bailout money, also shunned the Ritz, canceling a March event for top sales people.
This trend bodes ill for states like Florida, a popular vacation destination for firms looking to reward star employees. According to the Wall Street Journal, in the last quarter of 2008, Florida tourism dropped more than it has at any point since the period following September 11. Hotels are receiving cancellation requests from companies wary of showering employees with expensive trips as others lay them off in droves.
Stranger still, this new allergy to perks extends even to language. One client of Amelia Island Plantation, an upscale resort north of Jacksonville, even told the hotel it wouldn't consider a location whose name had the word "spa" or "resort" in it. Another bold customer even asked the hotel to drop the word "Island" from its moniker. (Oddly enough, the word "plantation" didn't sound any alarms.)
Welcome to the Age of Austerity, the polar opposite of our recent love affair with bling for the sake of bling.
Already, we're hearing anecdotes of shoppers uncomfortable with carrying bags emblazoned with the logo of high-end stores like Saks (SKS) or Nordstroms (JWN). Leering onlookers, disgusted at such lavishness, are shaming the well-to-do into buying their overpriced trinkets online. 2009's version of the "walk of shame" isn't down Frat Row on a brisk Sunday morning, but down Madison Avenue during the midtown lunch rush carrying bags from Prada or Coach (COH).
Purveyors of the inessential are hoping this is just a passing fad, that fast times and big budgets will be back faster than you can say AmEx Black Card.
Others, however, are shouting paradigm shift, as credit has distinctly disappeared from the American spending arsenal. Just how long it will be unavailable is anyone's guess. But as the rich are scorned and public displays of wealth are decried, the Age of Austerity rambles on, gaining momentum.
The next thing you know, that little blue box from Tiffany (TIF) will cease to carry the near-magical power to make up for that really really stupid thing you did once you were 12 beers in.
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