Off topic (again) - WSJ article about huge variation in hotel room rates.
May 21, 1999
Cheapest Way to Book a Hotel ...
Isn't Quite What You Think
By NANCY KEATES
Staff Reporter of THE WALL STREET JOURNAL
Lesley Leonhardt thought she was getting a good deal when she paid $325 for a
room at the Plaza Hotel in New York on a recent weekend vacation. But that
was before the computer-marketing executive found out the person a few
rooms away was paying $50 less a night. "How do they price these rooms?"
she asks. "It's getting as bad as airlines."
No -- it's actually getting worse. Remember
when the only choice in hotel rates was
between so-called corporate or weekend
rates? Pressed for more profits, the nation's
hotels are selling as many as 10 to 12
different rates for a single room these days.
What you pay depends on the phone number
you call, the discount club you belong to or
the color of your credit card. Sometimes
even the mood of the reservations agent can
make a difference.
And as the summer season approaches, the options only increase, with more
industry specials. "It's like a rug bazaar or a used-car dealership," says Sherri
Kimes, a professor at Cornell University's School of Hotel Administration.
Earlier this school year, Prof. Kimes assigned her yield-management class a
project to find the cheapest rate possible at the Hilton Hotel in Minneapolis. The
winner knocked almost $100 off the lowest rate by pleading with the clerk that
she had a job interview in town but had little money. "If you really beg hard,
they'll lower it," says Prof. Kimes.
Weekend Journal decided to see if there is an
alternative to begging. For our summer travelers,
we put 10 hotels, from the Drake Hotel in
Chicago to the Radisson in Pittsburgh, to the test
using six different methods for getting price
quotes. We called the hotel's 800 line, asked for
the corporate rate, and tested the Internet using
such popular Web sites as travelocity.com that
specialize in travel deals. We also found out what
we would get if we called the hotel directly, used
frequent-stay points, or tried a variety of outfits that sell hotel discounts, from
the well-known American Automobile Association to more specialized options.
The winner, and best method for snaring the lowest rates? It varied, but we did
well with "discount" clubs, which offer room discounts to travelers who pay to
belong to their outfits. (We used Entertainment Publications card, a discount
directory sold for about $30, and Andrew Harper's "Q" Club, which costs $95
a year to join and is an offshoot of Andrew Harper's Hideaway Report.) Two
national "whosesalers" -- Quickbook of New York and Hotel Reservations
Network of Dallas -- did well, too. Typically, these kinds of companies buy
pools of rooms from hotels and resell them at discounts to any traveler calling
their 800 lines.
The worst rates? Often it was doing exactly what
hotel ads ask you to do: calling the hotel directly
or dialing the central reservations number. "There
are much more creative methods," advises Jim
Coyle, the president of a hospitality consulting
group in New York. "Don't just call the number in the hotel ads."
Either way, the variations couldn't have been sharper. On the phone, the Park
Hyatt in Philadelphia offered us a standard double room for $320 a night that
was available for just $215 with the AAA rate. At the Nikko Hotel in Los
Angeles, we saved 34% off the hotel's quoted rate by using Quickbook. And
for the same room at the Drake Hotel, the prices ranged from $196 to $315.
"Our rates change on a daily basis," says a Drake Hotel official. "It depends on
what accommodations are available at the time." Another tactic we didn't even
use but suggest trying: Ask the hotel if your company has worked out a
negotiated discount, which is usually available to any employee.
Hotels, of course, have varied their rate structure and offered specials for
years. But the industry has been forced to become much more creative with
rates because its profit increases have slowed considerably (they were up about
11% last year, compared with 47% in 1996, according to
PricewaterhouseCoopers). Much like the airlines, many chains such as
Marriott, Hilton and Sheraton have "yield management" computer-reservation
systems that forecast room demand and determine rates for coming months.
Richard Hanks, Marriott's executive vice president for sales, insists the
company gets few complaints about varied rates because it's tried to
"rationalize" prices with advance-purchase deals and last-minute weekend
specials. "The customers understand why one rate is more expensive than the
other because it makes sense," he says.
But don't tell that to Stephen Rose of Los Angeles, who says he's tired of
playing the industry's game of room jeopardy. He recently decided to join
Harper's "Q Club," which has about 8,000 members. (The "Q" stands for
quintessential.) According to his calculations, the "Q Club" saved him 33% on a
one-bedroom suite at the Mark Hotel in New York, getting the room for
$450-a-night instead of its usual $675. This July, Mr. Rose will save $90 a
night using the "Q Club" at Hawaii's Mauna Kea Resort.
He also spent $300 joining American Express's platinum card, which he says
often gets him free upgrades, guaranteed late checkouts and free continental
breakfasts. "To me, it's all totally worth it," says the agent for writers,
producers and directors. "I always think I can do better."
That was our goal too, when we began checking out the litany of hotel rates.
The chart linked to above shows what we found.
Cheap Sleeps
If you're willing to dig, or pay an annual fee, you can cut your hotel rates. Here are
some travel clubs and wholesalers:
AAA
800-JOINAAA
Fee: $30-70
Entertainment Publications card
800-445-4137
Fee: $30
Hotel Reservations Network
800-964-6835;
No fee Quickbook
800-789-9887
No Fee
Harper's 'Q Club'
harperassociates.com
Fee: $95
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