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Business Travellers Get Their Luxury Hotels Back

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Earlier this week, the New York Times  reported  that, two years after an almost country wide clampdown on business travel expenses, companies are returning to luxury hotels.

Following the scandal caused by disclosures of AIG’s lavish, post-bailout retreat, many US companies decided to forgo, or at least seriously cut down on, employee travel. Luxury hotels were the hardest hit by this trend, and, according to the Times, some even went so far as to change their names to sound less luxurious. Words like, “resort” and “spa” were dropped in haste.

The Times quotes Bruce Duff, a vice president at software company Arcos, who clarifies that the stigma attached to these trips is much more about perception than cost. In recent years, Arcos has moved its annual user conference from the Florida coast to tourist destinations like Savannah, GA and Mobile, AL.

Recently, it appears that much of the stigma of staying at these hotels has fallen away. Businesses are now “trying to define the limits of acceptable luxury.” There is more focus on the impact a destination choice will have on the business as a whole.

Luxury hotels in particular have benefited from this recent change in perception. Requests for top-tier hotels have gone up 14% over other types of lodging.

Companies are no longer solely focusing on the bottom line. Instead, they are looking at a variety of factors in choosing destinations. One business traveler told the Times that staying at a nicer hotel “just sends an impression that you are doing well.”

Of course, recent economic events may stop this trend before it fully starts. Then again, with things as bad as they are, hotel costs may be the least of some businesses worries.

That said, if companies are looking for a truly inexpensive retreat, there’s a cruise that Minyanville could recommend.
POSITION:  No positions in stocks mentioned.