Obama To Blame For Luxury's Troubles?
The recession-driven meta trend here in the United States these days is economic modesty—even austerity—in stark contrast to the open flaunting of wealth that dominated the "Pimp My Ride" attitude of the past decade. In many circles of American life, luxury has become something to be embarrased about, not the aspirational status symbol that it recently was. And that, as I’ve noted previously, poses quite the conundrum for luxury hoteliers.
So I found it interesting during a chat this week with a UK hotel consultant that, despite the recession being a global one, the luxury-as-a-negative phenomenon seems to be largely confined to America.
"There isn’t such a strong sense of that in Europe," says Marvin Rust, a London-based hospitality managing partner for Deloitte. "Clearly, people are trading down—that will inevitably happen in a downturn—but there isn’t this sense that luxury is bad, which is what I felt when I was in the States last month."
Indeed, a few months ago, Wisconsin-based Robert W. Baird & Co. analyst David Loeb famously referred to luxury as "a dirty word" and said: "Conspicuous consumption, as seen in excesses in spending and demonstrations of wealth, is now out of style due to the economic and political environment. Along with it could be the luxury hotel segment, at least for now."
So why has the general aversion to luxury, which has become so prevalent in America, failed to reach across the pond? Rust believes Loeb hit it on the head when he spoke of the "political environment." While never referring to President Obama by name, Rust says that "government rhetoric" out of Washington that criticized lavish spending by bailed-out corporations is to blame. Few European leaders have been similarly critical, Rust says.
Is that really the difference? Is it possible that a few offhanded remarks by a politician can plague an entire industry sector in a country?
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