Sunday, January 10, 2010

The Art of The Deal

Shopping For Hotels During The Recession
Roadboys Great Website Shootout!

Hotel prices will drop a lot in 2010. 

No, I am not clairvoyant, but lets face it they went up too high in the past few years and are no longer sustainable at pre-recession levels.  

The hotel bubble was just like the residential real estate bubble. Years of hotel undersupply was rewarded with skyrocketing room rates, followed by a vigorous hotel building boom. Now those new hotels are in place but business travel has careened into a ditch. The few of us roadwarriors that still exist, after years of getting taken to the cleaners, are gonna get even. 

In 2009 we watched in amazement as the hotel industry desperately attempted to cling to its inflated pricing structure.  

We don't care that you are discounting weekends. We are wise to your ploy of sweepstakes and adding a few inexpensive perks. We have also noticed that you have quietly been taking out lotions, discounting only prepaid stays, leaving us one bottle of water instead of two, and have quietly been sneaking in new parking charges.

Quit moving the deck chairs and just drop your prices. 

Some of the top chains (i.e. Marriott) just can't seem to get it. I've been a Platinum member of Marriott for a decade, but in 2009 every time I compared the room rates between a Courtyard and a Hilton Garden Inn, the (much nicer) HGI was almost always significantly less costly. Hilton seems to be getting it.

So for a recent trip I thought I'd do a bit of comparative shopping. I knew I'd need 4-5 hotel rooms in a few months in San Francisco (which is usually a pretty darned expensive destination). So I started looking early and thought I would then keep tabs on price fluctuations until the date of travel.

Here is what I found.

90 days before the trip I started going online to check all the usual hotel websites. After about three weeks I decided the prices were not going to go down, so I opted for a 4 star hotel from Hotwire. 

Hotwire offers blind reservations. "Blind" means you know the location and the number of stars of the property, but not the name. The hotel name is disclosed only after the transaction is complete. Hotwire transactions are pre-paid, do not qualify for any frequent stay points, and are non-refundable. So I only use Hotwire when I know the trip is "for sure".

For recreational travel I like Hotwire a lot. Since I spend between 150 and 200 nights a year in hotels, I'm pretty picky. When I've had a problem with a Hotwire reservation they have made it good. Example: the description for a Hotwire hotel in Las Vegas offered a free airport shuttle. Now in my heart of hearts I knew the description had to be wrong. Frequent travelers to Las Vegas know that the cab mafia makes darned sure that NO hotel in Las Vegas ever offers free shuttles. While high rollers at the Wynn get a Rolls dispatched for them, the rest of us get a cab. 

So when I got there and confirmed there was no free shuttle, I emailed Hotwire. I told them I would have selected a different hotel (with a less expensive cab ride) if the description had been accurate (all true). They reviewed it, agreed, and gave me "hotbucks" which work like credits to use on future hotel reservations. 

Now for my test trip to San Francisco, Hotwire delivered the Westin Market Street for $89. The lovely Westin turned out to be perfectly located and had heavenly beds. It was a SCREAMIN deal at $89.

So even though I had already booked our rooms, as the date for the trip got closer, I went back to the web a few times to see if deals would have been better if I had waited and booked closer to the date of travel.

Admittedly it was hard to compare websites side by side as not all sites had the same hotels available at each visit. So I tested a few very common properties:

The Intercontinental: 
Expedia $99
Orbitz $119 
Sidestep $119
Priceline $132 
Quikbook $139

Le Meridian
Travelocity $97
Sidestep $97
Expedia $134
Getaroom $138

Mark Hopkins
Priceline $99
Kayak $99
Quikbook $99

The Westin
Hotwire (blind) $89
Non-blind averaged $196

Strangely, (which I usually like) was not very competitive on the dates I checked. There was was also a lot of price spread for the fine local chain (Kimpton).

What does all this mean? Well for a "for sure" pleasure trip Hotwire delivered the best deal. But I also noted that as the date grew closer the Hotwire offerings got pretty slim.  For business travel (where pre-paid non refundable hotel rates are rarely an option) shopping is essential. 

As you see above, although Expedia offered the best deal at the Intercontinental, it was not competitive at the Le Meridian. So, while price sensitivity is clearly emerging, to get the best deal you still have to surf around a bit.

I close by noting that I recently got a questionnaire from Marriott inquiring why I only stayed 67 nights with them in 2009. I thought about it. It kind of made me mad. I happen to think 67 nights in one year is a whole lot of nights. I also think that Marriott's 75 night requirement to achieve platinum is about 15-20 nights too high. 

What was surprising was that the e-mail questionnaire was constructed so that you really could not answer why you were staying less at Marriott. It almost felt like they really did not want to hear what they already know,  that they are just too expensive.
So, go ahead and start planning travel for 2010. 

Plan to spend a little time shopping, you'll probably be rewarded with darned good deals!

Roadboy's Travels © 2010

1 comment:

IniquitousFish said...


So where are we going with all these fancy hotel prices?