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-   -   How Do Room Rates Work? (https://www.fodors.com/community/united-states/how-do-room-rates-work-370413/)

dbenya Oct 21st, 2003 01:23 PM

How Do Room Rates Work?
 
My husband and I got our signals crossed and each booked a hotel room for the same night at the same hotel. He booked over the phone. I booked over the internet. When I called to cancel one, I discovered that my reservation was way cheaper than his. And then I poked around and found one even cheaper than mine. Although the cheaper rates didn't seem to be available on consecutive nights. How do hotels decide when to charge different rates for the same type of room? Do multiple rates apply to all rooms or just some?

uuhhhh Oct 21st, 2003 02:09 PM

depends on where. in vegas, rooms are usually priced higher for weekend nights, whereas in nyc, weekend nights are often discounted.

Patrick Oct 21st, 2003 02:20 PM

After much study and finding what seemed like no rhyme or reason for how they set their rates, sometimes better on the internet than by phone for one night, then just the opposite for the next night -- I've finally discovered the answer.

Each hotel has a big dart board with all prices on it. Each time you call they throw a dart and quote you the price it hits. If you are on the internet, the computer triggers a dart and then a reader translates that price to the computer.

At least this is as good an explanation as any other for the craziness of the rates.

Dan Oct 21st, 2003 03:05 PM

Hotels, like airlines, "segment" the market. Corporate travelers and convention groups may pay $150, but 'SMERF" (social, military, educational, religious and fraternal) groups may only pay $75 for the same room. These lower rates are offered when there's not enough high-dollar traffic to fill the hotel. Ditto for internet rates, etc.

Dan Oct 21st, 2003 03:06 PM

I forgot to add: hotel rates may be confusing but they're nothing compared to airline fares!!! It always amazes me how it's cheaper to fly THROUGH Charlotte (or Memphis or Denver or Chicago, etc.) than it is to actually board the plane there.

Wednesday Oct 21st, 2003 03:13 PM

I have worked for companies that sold hotels, although not the hotels themselves....We wanted to encourage internet bookings because one person could manage them without the overhead of a team of phone reps. The rates dropped for low and rose for "high" season, except holidays or festivals would increase the rates. Supply and Demand, weekends usually are more. But I have seen rates that have no pattern either, just depends on their capacity and marketing decisions and competition.

clairelong Oct 21st, 2003 03:23 PM

Patrick---you make me laugh! That was so funny.

Patrick Oct 21st, 2003 03:25 PM

Gee, I was dead serious (sort of). I once booked two nights in a hotel. The first night under my name done on the internet. The second night done under my partner's name by phone. Each night saved something like $50 from what I could do any other way. It's really crazy out there. I was glad they let us keep the same room, but for $100 I was willing to switch rooms if necessary.

gplimpton Oct 21st, 2003 05:11 PM

It's very much like fishing.
The hotels want to catch the biggest fish using the least bait possible.
They use all kinds of strategies to do this. They know certain dates will be high traffic or low traffic (holidays, conventions, school vacations, etc) and many know which types of access points will draw the most or least savvy travellers (internet shoppers are usually more savvy, last minute toll free number callers may not be or may be business travellers in a bind willing to pay whatever).
It's a constantly changing supply and demand game.
And each hotel chain and larege resort tends to have its own system.
In Las Vegas the system is very sophisticated...much like the computer software which sets airfares. Rates will sometimes change by the hour in high traffic periods.

missjanna Oct 21st, 2003 09:27 PM

Here's something strange I read in a travel magazine and found it to be somewhat true:
Rates are higher (especially for flights) if you check the prices between Thurs - Sun. If you check the same flight say, on a Monday, the price may have gone down. The article said because most people tend to book reservations right after gettign paid at the end of the week or on weekends when they have time to search. However, early in the week, there aren't as many reservations made.

It also goes by supply and demand. If a hotel realizes that it's nowhere near 80% capacity, they will drop rates. Also which way you get cheapest rates varies. Sometimes you get cheaper by calling, sometimes via the internet. Some areas are lower on weekends, and some are higher on weekends. Miami is higher on weekends, DC is lower. Go figure.

I feel like I need a sundial and an abacus along with a hamster running in a wheel to figure out the entire system!

dbenya Oct 22nd, 2003 04:17 AM

Thank you, everyone. I'm going to have to remember to run out and get a hamster before we start planning our next trip. ;-)

clairelong Oct 22nd, 2003 05:10 AM

I read this in a magazine today for flights: the best time to check was Wednesdays at 1:00 am.

MFNYC Oct 22nd, 2003 05:20 AM

Another thing when calling the hotel directly, call the general chain 800 number vs. calling the hotel sometimes give differate rates. Also, they never seem to volunteer any 'specials' they many be offering, so it always pays to ask. Also AAA or senior discounts or any other possible type of discounts, you have to ask them about.

OliveOyl Oct 22nd, 2003 05:33 AM

Destinations that are primarily business have lower rates on the weekends, whereas tourism destinations have higher weekend rates. No mystery there.

Hyatt's lowest rate is guaranteed through the internet, Hyatt.com (outside of opaque sites), and several other chains have the same guarantee.

Computer programs have fine tuned pricing to the nth degree, looking at what's already on the books, anticipated walk-ins, city-wide or large conventions where spill over is likely and on and on. It may look hit or miss, but it's science at work these days.


rahmanbar Oct 24th, 2003 12:13 PM

Had a really interesting experience the other day.

We're going to the Princeton, NJ and staying at the Westin (1st night being Thanksgiving, 11/27 and checking out on Sunday, 11/30.)

I found, when trying to book via the Starwood.com site's reservation program contradictory rate information.

It was ridiculous, (but not surprising), that it displayed normal, mid-week rates for Thursday (even though it was a major holiday). But, surprisingly it displayed the same rates (without qualification), for Friday and Saturday nights, weekend nights, that should have been priced accordingly.

Just as a lark, I tested their system again. This time making the first night, Friday, 11/28 (still checking out on 11/30.) Not surprisingly, WEEKEND rates (and other discounted options with onerous penalty clauses) were displayed.

Being fond of wasting time, I called the hotel directly to see if I could reserve through them the weekend rate for all three nights.

I won't go through the litany that followed, but suffice to say, for a variety of slightly silly and unexplainable reasons, it was impossible. The reservationist (who agreed it was ridiculous, but said she was powerless), suggested that I make two SEPERATE reservations - one for Thursday, at the mid-week rate, and another for Friday and Saturday nights at the weekend rate. She explained that doing that would "lower" the average price significantly.

I thanked her for her time, but told her that I'd have to think through the logic of it all before I decided whether or not I wanted to book a reservation.

(Sorry this is taking so long, but I found what followed illumninating.)

Without boring you with the minutia, muck and, mire of surfing, testing and more surfing on Starwood's site. I found the BEST rates - I booked Thursday at AAA rates and the other two days at Starwood's weekend rate.

Using this methodology I hold confirmed with a Thursday night rate just five dollars more than the rates for Friday and Saturday nights. (BTW, this yielded an "average" 3 night rate that was fifteen dollars lower per night that I would have received using if I had followed the reservationist's advice.

I've concluded that this chain's weekend tariffs beat the AAA discount.(I'm not sure if this holds on the reservation systems of Hyatt, Marriott, Wyndham, etc. etc. but when I have time I'll test it out.)

PS - In case anyone's wondering, both the Thursday night and Friday/Saturday night rates I finally booked carry no onerous penalties for change/cancellation etc. If any changes are required, notice has to be given bu 6 PM hotel time, day of arrival.

AAFrequentFlyer Oct 24th, 2003 01:25 PM

You folks seem to forget one very important factor in running a hotel/airline.

A hotel sells nights, and once that night is gone, it's gonnnne......

It's not like they could have a 50% sale for the previous night the next day to recoup their cost.

So as OliveOyl said, what may seem like chaos and stupidity to you, it's actually a very good system that works most of the time. The business is trying to squeeze the most for the upcoming night, and with the help of the computers it usually does. The software tries to make everybody happy without turning anybody away. It seems like an impossible task, but it does work.

uuhhhh Oct 24th, 2003 01:34 PM

clairelong,
was that 1:00am gmt, est, cst, mst, or pst?

clairelong Oct 24th, 2003 06:41 PM

it didn't say...sorry

joan Oct 24th, 2003 07:12 PM

I'm going out to get a dartboard, abacus, sundial AND a hamster. On second thought, no hamster...this is so frustrating I might end up throwing the darts at the hamster.

rahmanbar Oct 25th, 2003 01:47 PM

"Yield management" aside, it seems to me that if a hotel company's website provides a link to reservations at their "best rates," those are the ones that should be displayed, along with any qualifications as to restrictions.

When their pre-set limit of "bargain bookings" is reached, stop displaying bargain rates - if one becomes available again, display it.

That's not a complicated programming effort.

Either that, or forget the hyperlink (and accompanying blurb) altogether, let potential guests go straight to reservations, fill in the appliable dates and be able to view ALL rates currently (and appliable restrictions) along with a disclaimer regarding availability of rate categories/classifications. Hiding them, or making customers go to extraordinary lengths to unearth them seems patently ridiculous. It's the electronic equivelent of what has to be accomplished verbally in order to go beyond a reservationist's efforts to get a guest to book at rack and their pre-programmed responses as the customer strives to get the best deal available.

What's fair is fair - let them end the bait and switch and word-games (spoken or displayed).

After all, this is hotel room reservations/rates we're talking about; not the dickering that is par for the course with a salesperson in an automobile showroom.


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