Starwood Hotels and Resorts CEO Frits Van Paasschen said during a CNBC interview that group cancellations were up 50 percent in light of the "AIG Effect," but Van Paasschen remained optimistic on the eventual uptick in luxury hotel demand and bookings.
“What we are starting to see is a bottoming out in the economy, so bookings are starting to flatten out. I wouldn't say I necessarily the signs of a recovery, but it's a plateau,” he said. "The sense of panic has gone away and we would encourage business leaders to get back out. Politicians have basically said it's ok to get out and travel again. To say that things are actually getting better would be a stretch. To say that the free fall has gone is fair." [more]
Van Paasschen also said that he hadn't seen business travelers downgrade their hotel properties to the limited service brands, but instead of staying at the luxury properties, business travelers are migrating toward the upper upscale tier. Meanwhile, Starwood plans to continue with its $4 billion Sheraton brand overhaul despite the weakened economy.