Choice Hotels International Inc. (CHH)

Luxury Hotels Too Fancy for Their Own Good? by Carlos Portocarrero, WeSeed Writer I never understood fancy hotels: Who would pay hundreds of dollars to stay in a room for a few nights? I don't care what the thread count is and how many personal butlers are at my disposal - a hotel room is still just a place to sleep when you're in another city. Then I got clued into a few things: the people who stay at luxury hotels are either a) so rich it doesn't matter, or b) business travelers. Which made me wonder: If I were a business owner, why would I have my people staying in luxurious digs just to do a PowerPoint presentation in Newark? Well, now that the economy is in a tailspin, companies are starting to ask themselves that very question. No longer are soaring profits and good results reason enough to pay for expensive hotels, and that means these hotels are seeing a drop in business. Who is going to be affected? The big names in the luxury game include Intercontinental Hotels, Ritz Hotels, and Hilton Hotels. Here's where it gets interesting - a lot of these corporations actually own a mix of luxury and more affordable places to stay: • Marriott International (MAR) o Pricey: Ritz-Carlton, Marriott Hotels & Resorts, Renaissance o Cheap: Courtyard, Fairfield Inn, SpringHill Suites, Residence Inn, TownePlace Suites • Hilton Hotels Corporation - owned by the Blackstone Group (BX) o Pricey: Hilton Hotels, Conrad Hotels, Embassy Suites, Homewood Suites, Waldorf Astoria o Cheap: Doubletree, Embassy Suites, Hampton Inn, Hilton Garden Inn • InterContinental Hotels Group (IHG) o Pricey: InterContinental, Crowne Plaza, o Cheap: Holiday Inn, Candlewood Suites If luxury hotels actually suffer, do you think their cheaper brands will pick up the slack? Wouldn't Choice Hotels (CHH) - the company behind budget-only mainstays like Comfort Inn, Comfort Suites, Quality Inn, Sleep Inn, Clarion, and Econo Lounge - figure to do that much better? To all the business travelers out there: have you noticed any changes? Which hotels are you seeing more of now that you weren't before?