CHECKING IN ON HOTEL RATES NOW
By Joe Brancatelli
November 3, 2010 -- Here's the good news-bad new joke on shopping for the best hotel rates now.
The good news: The weak economy and an ill-advised hotel building spurt that began in the middle of the last decade has left four in 10 guestrooms empty on an average night in America. And many of the rooms that are occupied are filled with travelers paying a fraction of the price they paid during the boom times in 2007. Hoteliers are "wrestling in an environment where rates have dropped 20 percent or more like 25 percent," Marriott International president Arne Sorenson grumbled during a recent televised interview.
The bad news: Albeit slowly, prices are rising again as demand has trended up. And no matter how many rooms are empty nationwide "on average," you'll pay top dollar if you're headed to a destination that is crowded because of a conference, a trade show, or special event.
So what's a savvy business traveler to do in these uncertain lodging times? Think both tactically and strategically about your hotel needs and consider these freshly minted tips for getting the best lodgings for the least money.
Buy Exactly What You Need
Far too many otherwise savvy business travelers continue to make the 1950s-style "hotel or motel" mistake. It has been decades since the lodging choice was that simple (or that boring), and smart travelers know what "segment" they need from the hotel industry. So-called focused-service brands like Hilton Garden Inn offer up a raft of great perks—free Internet, in-room fridge and microwave—but largely ignore stuff like bell staff, conference and banquet facilities, and fancy restaurants. Others—Hampton Inn and Holiday Inn Express—offer a free breakfast as part of the nightly rate. If you need lodging for a week or more, so-called extended-stay brands such as Residence Inn or Candlewood Suites offer more space in fully equipped, apartment-like settings and feature services like grocery shopping. Don't let industry jargon confuse you (What is an "upper upscale" hotel anyway?), but knowing something about the available options will help you get exactly what you want from your lodging at the best price. For each stay, make a list of the services you need (and which you don't) from your hotel, then book the brand that most closely matches your wish list.
Price Out the Deals
The lodging industry has adopted the dynamic, yield-management approach to prices favored by airlines. They now promote a wide variety of rates, complete with varying purchase rules and value-added amenities. (The deals also come from a wide variety of sources: credit-card promotions, special rates from groups such as the AAA, pre-negotiated "corporate" pricing, etc.) That not only means the full-priced, suggested-retail "rack" or "published" rate is meaningless, it also means you must ignore the simple conceit of expecting the "lowest nightly rate" to yield the best price over the entire length of your stay. As you can see from the chart below, quoted rates at a representative high-quality, full-service hotel in San Francisco vary by more than $100 a night. That shouldn't surprise you in this era of massive discounting. But what might surprise you is that the lowest nightly rate ($207) won't yield the best price over the course of a three-night stay. The best three-night price ($518) comes via two promotional packages that offer a third night free after two paid nights at a slightly higher daily rate.
Shop the Online Market
As you can also see by the chart, the lodging market is more like a Turkish bazaar than ever before. Literally thousands of Websites compete for your business and offer distinctly different prices to entice you. Most hotel chains have a "lowest-rate guarantee" if you book via their proprietary website, but I've found those promises to be riddled with exceptions. Shop around with impunity: third-party online agencies such as Orbitz, discounters such as GetARoom.com, and my personal favorite, Quikbook, and so-called "site scrapers" like Kayak.com all have their place in the pricing firmament. No one site will always generate the best price. And one important caveat: Hotel chains use their frequent-guest programs as a way to keep shoppers in line. Many programs won't give you points if you book your room through third-party channels. Others won't honor your elite-status perks and privileges unless you book directly with them.
The Benefits of Buying Blind
As hotel discounting ramped up after the financial meltdown of 2008, more prestigious properties made room inventory available to blind booking sites such as Hotwire and Priceline. That means you can score great accommodations at shockingly low rates if you're willing to book blindly. Except for a general location and the booking site's untrustworthy "star rating" of quality, however, you won't know what hotel you've booked until after you've committed to and prepaid for the accommodations. I find this kind of pig-in-the-poke shopping unacceptable, but many other experienced travelers do not. And some get terrific insight from sites like BetterBidding and BidonTravel, which serve up data on which properties you'll get from a blind Priceline or Hotwire reservation.
Understand the Pricing Ladder
Some travelers tenaciously cling to the phone when booking a hotel room. By habit or happenstance, they continue to dial a hotel's reservation desk or chain's call center in search of rates. If you're old school too, at least know how that the rules have changed. For starters, most individual outposts of the big hotel families (such as Hilton, Hyatt, Starwood, Marriott, InterContinental, Choice, and Wyndham) no longer have onsite reservation offices. When you call direct to the hotel and ask for "reservations," you'll be shunted back to the chain's central call center anyway. And no matter who you reach when you dial, understand the psychology of the conversation. Hotel reservation agents are trained to quote the highest available rate no matter what you ask for when you start the conversation. You'll have to drive them down the "pricing ladder" by repeatedly and doggedly asking for something less expensive. The only way you know you've reached the lowest rung of the ladder? When the agent is prepared to let you hang up without making a reservation. Even then, it pays to ask: "Can you check once more for a lower rate?"
The Value of Value-Added
As the chart shows, hotel rates are often larded with value-added perks: free breakfasts, free parking, late checkouts, etc. Hotels create a bewildering variety of packages that may include everything from wine and museum admissions to spa treatments and shopping discounts. The bundles help them avoid what the lodging industry calls "naked discounting," the unadorned reduction of the daily rate. Some bundles are transparent baloney—charging $25 more a day for a "free breakfast" that might only cost $15 when purchased separately, for instance—but some really do add honest-to-goodness value. But only you can decide what is valuable. A package that includes a free massage that you never have time to claim isn't particularly cost-effective. So before booking a bundle, make sure to price out the retail cost of the components and make a smart judgment about whether you'll actually have the time or the inclination to consume the value-added products or services.
Pay Now, Pay Later, or Pay a Penalty
Especially when they catered to the business travelers, hotels in the past rarely demanded prepayment. That has changed. Many chains now offer their lowest rates only if you book the room far enough in advance and only if you pay in full in advance when you make the reservation. Many third-party sites also insist on prepayment. The problem with prepayment is obvious: You've taken a cash-flow hit and you'll almost never get a refund if your plans change. But don't assume that paying more by paying later is risk-free. All hotels and booking services now require a credit card to guarantee a pay-on-checkout reservation. You'll pay a fee if you cancel your reservation too close to check-in time. You may also pay a penalty if you don't stay for the full term of your reservation. And you'll certainly be charged for at least one night if you are a no-show for your reservation.
The Fine Print…
One final tip: Keep a copy of your reservation information and audit your bill (the hotel industry calls it a "folio") before you check out. Not just for the obvious errors like fees for in-room movies you didn't rent or charges for mini-bar purchases you didn't make. Since hotels often vary rates on a day-by-day basis during your stay, there's no guarantee that they've correctly charged you the prearranged prices. On Monday, for example, I checked the folio slipped under my door after a two-night stay. The hotel billed me Saturday's night rate for both nights of my stay instead of the Saturday-night price and the lower (by $75) Sunday-night rate I had booked. I had to go to the front desk to correct the error and the clerk wouldn't adjust the Sunday price until I showed her a printout of my reservation confirmation.
ABOUT JOE BRANCATELLI Joe Brancatelli is a publication consultant, which means that he helps media companies start, fix and reposition newspapers, magazines and Web sites. He's also the former executive editor of Frequent Flyer and has been a consultant to or columnist for more business-travel and leisure-travel publishing operations than he can remember. He started his career as a business journalist and created JoeSentMe in the dark days after 9/11 while he was stranded in a hotel room in San Francisco. He lives on the Hudson River in the tourist town of Cold Spring.
THE FINE PRINT This column is Copyright © 2010 American City Business Journals. All rights reserved. Reprinted with permission. JoeSentMe.com is Copyright © 2010 by Joe Brancatelli. All rights reserved.