How Luxury Hotels Are Bringing Back Business TravelersPromoting value over opulence is a strategy that's helping upscale properties woo clientele.

The man in the five-color tie walked out of New York's Sherry-Netherland hotel shortly before 8 a.m. one recent morning and turned left down Fifth Avenue. He was heading, I suspect, for a working breakfast at the Hyatt, the Westin, the Parker Meridien--anywhere that might send a more comforting message to a client or associate than a hotel with a $650-a-night rack rate.

Not long ago, you'd hear stories about upwardly aspiring businessmen who slept at generic chain hotels but scheduled their meetings in the lobbies of Mandarin Orientals and Ritz-Carltons. Some would go as far as to ride the elevator up so they'd be seen getting out of it when it came back down. Those days are gone. Now, executives who stay at the Ritz sneak to the Marriott for their omelets, lest a shareholder, limited partner or potential client accuse them of profligate spending. "They all got shellshocked by the AIG effect," says Michael Ullman, the Sherry-Netherland's COO.