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Obama To Blame For Luxury's Troubles?

July 1, 2009

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?

Posted by Adam Kirby on July 1, 2009 | Comments (9)

August 24, 2009
In response to: Obama To Blame For Luxury's Troubles?
Brian Hayashi commented:

While visiting travel professionals in a recent trip to Las Vegas, it was clear that their ire was aimed at the President and to a lesser degree Sen Harry Reid, who in their view had done little to nothing in terms of representing the interests of Las Vegas. More than just a throwaway remark, the sense was there was a concerted effort including the notion of a "black list" where travel to traditional destinations like Orlando and Las Vegas were highly, highly discouraged. (I'm not even sure if that black list exists, or if it's just a rumor.) One restaurateur noted that he traditionally made his business from January through June bookings, which had fallen precipitously to the point of calamity. We then wondered aloud if it was truly the President's work, or if the travel industry continues to take too much for granted and like Reid, failing to adequately make the case on Capitol Hill.


July 2, 2009
In response to: Obama To Blame For Luxury's Troubles?
Robert@thewinnerstable commented:

Obama has a hatred for "Rich" America. His whole life has been a study of radical and revolutionary Socialism. He is creating a Crisis and Divisive atmosphere in our country in order to destroy our capitalist based economy and freedom based Republic. Don't be fooled by his charismatic persona. The man is out to destroy America as you know it.


July 2, 2009
In response to: Obama To Blame For Luxury's Troubles?
Lars Hansen commented:

As a european with 5 star hotels to manage in europe.....I must agree with Marvin. The current times are tough but not because there is a stigma attached to luxury, it is purely centered around caution. As 3 and 4 star hotels are not "taking up the slack" in the meetings and events area- I conclude it is a general market shrinkage whose evolution will mirror economic confidence. As a hotelier the remarks by Obama should have been directed at prudent corporate decisions reflecting the economic times instead of targeting a specific business segment.


July 1, 2009
In response to: Obama To Blame For Luxury's Troubles?
hhotelconsult commented:

It is far too complex to suggest it is simple one man's comments. If he hadn't said it, the press would have been all over it. The press had already driven the anger, furour, and panic.... which ended up leading to Obama's stupid remarks. Did they hurt, yes... they did. Are they solely responsible? That is ludicrous. It is so much more complex than simply scapegoating one person. That is just lazy. Start talking Economics going back to the Carter Administration CRA and even before him.... then maybe we can get to Obama. It was coming whether Obama spoke his words or not. @hhotelconsult


July 1, 2009
In response to: Obama To Blame For Luxury's Troubles?
Borat commented:

Five Dollar Foot Long


July 1, 2009
In response to: Obama To Blame For Luxury's Troubles?
Chris commented:

You must be kidding! This is the price we are paying for sleeping at the wheel of this great country for the decate. Meanwhile, sheer incompetence from our so called "leaders",corrupted politicians from both sides of the aisle, and abuse of capitalism by Wall Street created this mess. Luxury is a magnificent addition to our life It is here to stay but we need to re-invest in our economical and cultural values in a healthy way.


July 1, 2009
In response to: Obama To Blame For Luxury's Troubles?
treichart commented:

I think this is happening and the Pres. that is in office is to blame having a socialist attitude in office in the states is and will have an effect to all the people in the USA,It does not stop this pres. from spending millions of dollars on himself and his family.Obama is a socialist and is close to being a dictator he has spent more than any pres. in history and has mortgaged the future of the USA to the point that it may never come out of this.It is a good time for the Euro to take control as the dollar will continue to slide and if other countrys continue to buy the bad debt that America is pushing then shame on them as they will feel the downdraft of the fire sale that is happening in every state across America right now.At this time we are selling every major piece of every major city to any one that will pony up the cash this will have implications in the future to a degree we have never seen.Its time to say 4 and out with the current administration,keep doing this and maybe we will get someone with half a brain You're fired ....Next


July 1, 2009
In response to: Obama To Blame For Luxury's Troubles?
Moonraker commented:

Absolutely - the government went out of its way to Condemn luxury stays, meetings, locations - targeting Las Vegas, Coastal Spa Hotels and others due in large part to certain Companies that were receiving help or tax payer aid continuing its program to provide outstanding facilities in conferences, conventions, rewards, sales and marketing roll outs, etc. It will take a long time for the industry to fully recover as it must overcome both the economy and the stigma government pasted on the upscale brands.


July 1, 2009
In response to: Obama To Blame For Luxury's Troubles?
Bill commented:

You are dammed right it is President Obama's fault along with John Kerry, his royal highness from Massachusetts. God forbid companies want to go meet customers, and train their employees at luxury hotels!

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