Recession a wakeup call for elite hotels

Hotels in Chicago, as well as other big cities, are offering dramatic bargains to draw visitors during this economic lull.

Here, the prestigious Drake Hotel, famous for hosting Princess Diana during her only visit to Chicago 13 years ago, started the price war among Chicago hotels last January that continues today.

The Drake started offering a $95-a-night rate in January that dared others to follow, said a rival hotel executive who declined to be named. That rate ended in mid-April, but Chicago's hotels continue to offer deals.

The bottom dropped out last September as the Wall Street financial crisis became apparent.

"It was as if someone turned a switch off. We saw reservations shut off," said Lisa Aviles, director of revenue at the Allerton Hotel.

The result is great savings for vacationers -- especially Midwestern families coveted as the best possible revenue generators -- but has led many Chicago hotels to lose 15 to 30 percent of their revenue per available room, insiders said Monday.

No one from the Drake could be reached for comment Monday, but the hotel now is charging peak-time summer rates. The absolute lowest quoted rate is $319 per night, although the TravelZoo Web site lists a $139 rate available at the Drake.

Besides low prices, hotel executives quote deals that add to a traveler's experience. At the Drake, it's the "American Girl Doll" package for two adults and one child at $414 per night, which includes a free buffet breakfast, baked cookies and milk during turn-down service each evening, a guided tour of the Drake Hotel and an American Girl Doll bed to take home.

Here are other examples:

** The Allerton Hotel at 701 N. Michigan Ave., which underwent an $11 million renovation last year, offers a lowest-possible rate of $128. The cheapest of its four summer packages is the "Historic Architectural Experience" starting at $229, with free breakfast for two, a disposable camera, two tickets to the Wendella boat tour and free wireless Internet access.

** InterContinental Chicago at 505 N. Michigan Ave., famous for its "Johnny Weissmuller (Tarzan)" junior Olympic indoor pool, starts at $139 and is offering eight summer packages. The "Hot Summer Nights" package offers a $199-per-night stay, including 50 percent off valet parking and 50 percent off food and non-alcoholic beverages at the hotel's restaurant, Zest.

That compares with a yearly average rate of $249 to $299 per night.

** Sofitel Chicago at 20 E. Chestnut starts at $215 per night. Its lowest-priced summer package offers a three-night stay at a cost of two nights, bringing the per-night rate to $143.

The average non-discounted rate is $325 for one night.

** The Peninsula Chicago at 108 E. Superior offers a $395 special summer rate. Its lowest-priced "Summer Splendor" package starts at $450 a night and includes a $100 gift-certicate at check-out toward a future stay.

A non-discounted rate would start at $575 for a superior room with a king-size bed.

"We are primarily focused on attracting the driving audience within 500 to 700 miles," said Marc Anderson, director of marketing for the Peninsula Chicago.

Said Bart Ansems, director of revenue at Sofitel Chicago, of the offers, "There is such high availability (of rooms). ... We are fighting for the same business."