Tips from a former hotel manager & financial director
Jan 17 '00 (Updated Jan 19 '00)
What most people don’t realize is that hotel rates are in general HIGHLY negotiable.
A hotel room is one of the most perishable commodities anywhere. The value the next morning of an unused hotel room is basically ZERO.
Hotels use highly variant rates; the idea is to maximize total revenue as opposed to per room revenue.
Example
A 160 room hotel rents out 100 rooms at $130; total = 13,000
-or-
A 160 room hotel rents out 80 rooms at $150 =12,000 –and-
50 rooms at $80 = 4 ,000
Total = $16,000
The extra cost of renting the extra 30 rooms may be $300-$600, this makes the extra profit at least 2,500.
The hotel raised it’s rates to $150 knowing full well that it would attract fewer people (only ½ occupancy) at this higher rate; however it made the rest of the rooms available at an average discount of 50%.
BTW- this is why the “rack rate” is often much higher than the rate quoted to you when calling reservations.
Advance Reservations:
Now you probably are thinking I didn’t come here to find out why hotels are ripping me off. I wanted to know how to get the lowest price I can get.
In the second example, the hotel has allotted 50% of it’s rooms to discount- as long as that 50% is available, and you know the magic words, you can book at some discounted rate.
Whether that be by 50% discount card (hotel/travel clubs, entertainment books), via travel agent (usually packaged specials), via 800 reservations line (usually national discount program rates (limited available (such as Holiday Inn Great Rates), or through direct barter with the hotel’s reservation department).
Here is my recommended method of getting the best price – reserved in advance:
1. Pull together all of your membership cards (Sam’s Club, Frequent Flier Card’s AARP, Amway, etc.- whatever you belong to)
2. Put together a list of hotels or hotel companies to consider while staying in the city you are traveling to.
3. Call the 1-800 number for each hotel company you are willing to stay at. Ask for rates available in the City and State you are travelling to; if you are looking to stay in a particular part of town and know that hotel’s name start there. After a price is quoted ask for “special marketing program rates, or weekend travel rates (if appropriate)”such as great rates for Holiday Inn. These are sometimes discounted more than 50%. Some resort hotels even have special weekday rates.
Also, ask what the AARP discounted rate is, whether discounted rates are offered through your airlines frequent flier program, whether they give a Corporate rate or to discount to (Sam’s Club, Amway Distributors, your company, your organization, …. ) The operator may get huffy…that’s ok, check all the rates before moving on to asking her (or him)
“Do any of the other hotels in a 5/10/15/20 mile radius (whatever suits your needs) offer a better rate?”
As long as there is no penalty for cancellation, reserve your best rate now!
4. Call the hotel you have booked at and speak to their reservations department, do not disclose your name, ask what rate specials they have for the time you are coming, ask what their rack rate is if you have a 50% of “regular price” certificate- if it is less then the price quoted ask about the availability of rooms at this rate. If any of the prices quoted are less than the price you reserved at, change your reservation. Note: Do not admit you have a reservation until you are ready to change it. Get a new reservation # and cancellation # if either is available & get a copy faxed or mailed to you.
5. Call the hotels in the area & go through the same steps in #4 above; then disclose the price you are getting at the hotel in #4 (if necessary) to leverage the price you may be able to get at #5. i.e. “I really want to stay at the Radisson, but my price at the DoubleTree is just so much better, can you beat it?”
6. If you are still wanting to lower your price arrive early at your destination, and if you are sure cancellations prior to 4 or 6 pm are allowed go into hotels at your destination, and use technique 5 above – I really want to stay here, but I made my reservation at ––––, can you beat (or at least meet) their price?
Last minute rates
If you arrive at your destination without a reservation, the key is- Do not be afraid to walk away, especially late at night As I said before, a hotel generally gets nothing for an empty room; if the parking lot is empty and the hotel hasn’t presold every room, the hotel will do everything reasonable in its power to have you stay. Use the techniques in number 5 above to help negotiate the lowest price you can get before you go; if the area is full, the hotel will call your bluff, so don’t turn down a good rate, or even a bad rate if there are no vacancies anywhere else in the area.
I have saved hundreds of dollars per week for myself and business associates over the years using these techniques. Hotels are like airlines, prices and deals change rapidly - the idea is to maximum revenue for what is basically a fixed overhead ("Yield Management" is the technical term; the difference is generally, in hotels, the person who can approve an extra special rate is easily accessible to the reservations agent you are communicating to (if the deal you are asking for is outside the bounds he or she can approve on his or her own).
One more thing - although you may feel you are hassling the reservations agent; be extra nice to them. Apologize for having them look at that next location. Chit chat with them while they are looking up “what they can do”. They are beat up all day by angry or stressed travelers. You never know what deal they may be able to cook up for the nice man or lady who “made their day"!
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