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Gap between wealthiest travelers, everyone else has widened

By Christopher S. Rugaber

Associated Press

Published: Wednesday, June 4 2014 12:00 a.m. MDT

In this Tuesday, May 20, 2014 photo, ceramist and Airbnb host Jonathan Entler, left, and his Airbnb guest Megan Walsh, a Chicago writer on a Summer internship, enjoy the afternoon in his Echo Park home in Los Angeles. Deeper savings can be had through sites such as Airbnb that arrange for people to rent out rooms, apartments or even couches. The number of listed accommodations has soared since Airbnb’s founding in 2008 to 550,000 _ not far below Hilton’s 685,000 rooms worldwide.

Damian Dovarganes, Associated Press

NEW YORK — Private elevators, personal shopping assistants, six-bedroom suites with their own postal codes. Even helipads. This is what the super-rich have come to expect from hotels.

For others, vacation now means renting someone's apartment, a spare room, maybe just a couch — anything to save on the cost of a hotel.

As the gap between the wealthiest travelers and everyone else has widened, so has the way people are experiencing vacations. The wealthy are looking for ever-more pampering. Many others are seeking new ways to economize.

And the lodging industry is adapting — at the high and low ends — to meet the diverging needs.

Luxury hotels are catering to financial elites from Russia, China, Brazil or the Middle East who now routinely hop around the world and don't mind dropping $20,000 a night for a glamorous accommodation.

"High-end travel in the air, on the sea and on land has never been more robust," says Steve Carvell, an associate dean at Cornell University's School of Hotel Administration. "There are more people with more concentrated wealth."

Luxury hotels are arising even at iconic middle-American tourism spots such as Walt Disney World. Four Seasons will open a 444-room resort there in August with 68 suites, including a nine-bedroom royal suite sporting a 1,000 square-foot (93-square-meter) private terrace with views of the park's nightly fireworks.

During the Great Recession, many resorts dropped "resort and spa" from their name. The idea was to appeal to corporate organizers who didn't want trips to seem extravagant. Excess now appears back in style.

In November, Four Seasons added the phrase "and residences" to its mountain resorts in Vail, Colorado; Jackson Hole, Wyoming; and Whistler, Canada. It's pursuing families seeking a residential experience with the pampering of a hotel staff.

The six-bedroom suite in Vail fetches $15,000 a night. You get three living rooms and a movie room. The suite includes a dedicated assistant who can arrange airport transfers, private ski lessons and after-hours shopping.

The return of extravagance reflects one characteristic of the recovery: After paring their vacations along with everyone else during the recession, the wealthy have rebounded with force. Since 2009, hotel spending by the wealthiest 20 percent of Americans has risen about 6 percent, according to inflation-adjusted data from the Bureau of Labor Statistics. The middle 20 percent are still spending nearly 3 percent less.

To stretch their discretionary dollars, middle-income vacationers are fueling one of the industry's growth areas: "limited service" lodgings. At Marriott's Fairfield Inn, Hyatt Place and Holiday Inn Express, you get free Wi-Fi and breakfast. But there's no bellman, concierge or restaurants.

The idea is to draw travelers who feel priced out of full-service hotels. People can still say, "I'm staying at the Marriott," even if it's the Fairfield Inn, says Bjorn Hanson, dean of New York University's hospitality school.

But many people are seeking deeper savings through increasingly popular sites such as Airbnb that arrange for people to rent rooms or apartments. The number of listed accommodations has soared since Airbnb's founding in 2008 to 550,000 — not far below Hilton's 685,000 rooms worldwide. Some studies suggest that Airbnb could be cutting into budget hotels' revenue.

Robin Lynch, 34, of New York City put 14 relatives, including her in-laws, in five Airbnb facilities in Brooklyn for her wedding last year. She estimates she paid roughly $200 a night, on average, compared with the $300 she'd expected for a hotel.

"That amounts to a lot of savings over seven days," she says.

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