Hotel giants seek refuge in niches
It's a trend pre-dating the global slowdown: big hotel chains are moving into the quirky boutique sector to tap into a niche of profitable growth. What's not clear now is how many can succeed. Hotel revenues have fallen sharply since last October and shares in hotel groups in Europe fell by more than 30 percent in 2008 as investors anticipated pressure on earnings this year. Nonetheless global giants from InterContinental -- the world's largest hotel group -- to Marriott and Starwood are launching boutique brands in Europe, with others set to follow as they face the biggest industry downturn in a generation. Consulting firm PricewaterhouseCoopers in December forecast U.S. demand for hotels in 2009 would fall by 2 percent which, when coupled with an increase in supply, would reduce occupancy levels to 58.6 percent -- their lowest since 1971.