Fear of being "seen in a luxury hotel while they are perhaps laying off thousands of people or taking advantage of state aid" is leading to many corporate managers shunning high end hotels according to a senior executive of Hyatt Hotels.

Short of taking a leaf out of Kathy Fuld's playbook, there are few options left for companies under fire for an ever-expanding definition of "corporate excess" but a direct consequence has been a thinning of revenues at higher end hostelry.

The Hyatt executive is sharply pessimistic saying that" the market for luxury hotels would remain depressed through 2010 and recover slowly in 2011". Similarly, as this article notes "the penthouse suite at the Four Seasons New York. With waterfalls on its walls, gold-encrusted furniture, and balconies surveying Manhattan from a perch 52 stories high at $35,000 a night" is verboten.

Such negativity is not surprising but recent history (the aftermath of 9/11) offers pointers to a sharper recovery from forced austerity. Then as now customers were shunning major brands and boutiques and choosing vanilla hotels that capitalized on the sentiment against luxury by not lowering rates as rapidly as their upper crust brethren.

In the end, Luxury hotel companies now more than ever need to diverse geographically just as Bombardier, the luxury private jet manufacturer did a couple of years ago in moving away from dependence on the US corporate market. Many hotel companies are, in fact, doing just that as exemplified by these companies moving aggressively into India and the Middle East.

The US, in the meanwhile, is seeing signs of life in the luxury market outside hotels - that should eventually translate into a revival for hotels as well.

Vijay is Chief Operating Officer and part-founder of Apple Core Hotels- a chain of 5 midtown Manhattan hotels offering value and comfort in the heart of the city.Member of the board of Directors - Hotel Association of New York.

www.vijaydandapani.com