How many people really pay rack rates?
 

We never pay rack rates when we travel. How many people out there do you think actually pay these rates? People who don't travel often or people who are not internet savvy might not know enough to look for great deals. Sometimes we search and book but then change our plans if something better comes along.

I've never paid rack rates, although my husband does all the time since his secretary makes the reservations and could care less about shopping around. I'm always amazed by what he pays for a Hyatt or Westin. <BR><BR>Companies could save a fourtune by employing someone like me, who knows her way around a discount hotel site, to do their bookings for them, it would pay a nice salary and then some! Hey, I'd work on 50% of the difference in savings alone, and still make out like a bandit! Now there's an idea....

Nina, most companies do have a that person you want to be. They are called the "In House Travel Agent". Your husband either works for a small company or doesn't go through the agency.

It's a division of a large company, but I think she just calls the hotels direct and asks for the corporate rate. Back when I worked for Xerox, I used their in-house agency (we had to), and found their rates very high, especially for airline tickets! Maybe if those agents worked on commission they'd try harder!

Nina, rack rate and corporate rate aren't the same thing. At most hotels, corporate rate is lower than rack although it's often not the lowest available.

... but many of the reservations we make come with cancellation fees, and most buisness traveler's schedules change all the time (and at the last minute), so by booking at a higher rate they are often (not always) given more flexibility in their ability to cancel.

I know that, but corporate rates seem to be barely 5% less than rack rates. Sometimes they are exactly the same as rack rates. Hotels don't seem to give the corporate discounts they used to.

Often many companies have a special travel agency that handles their business, if they don't have an in-house agent, and those agents do know how to get good hotel rates. Corporate rates are not the same as rack rate, and business travel does not have the same requirements as leisure. It often has to be booked on certain dates and convenience to meetings or facilities is important, and it often must be booked at the last minute. Most large companies are not really that stupid that they are throwing away a lot of money on travel. Companies that use one particular hotel frequently, such as where they have a facility or branch, often have a special rate set up for their firm.<BR><BR>Also, those are business expenses, and depending on the business can often be charged to a client, so it is not productive to stick your employees in terrible hotels, or get them the worst rooms or inconvenient locations to save a few dollars. It's also not a good way to retain good employees.

Nina, the only reason that the hotels can afford to provide you the lower rates for your personal travel is because the corporations are willing to pay a higher rate. So if you went to work for the corporations, you'd just wind up ultimately hiking up the vacationer's rates. You're not as bright as you obviously think you are about these things.

jjj, Why so grouchy? I know that businesses subsidize hotels, airlines, etc., but if it were MY company, I wouldn't care about the vacationer's travel dollars, now would I?

Business travelers need a lot of flexible to change or cancel travel plans. Using a discount hotel site may not be a good idea if there are penalties for changes/cancellations.

Oops, I meant 'flexibility'

I give up. What is a rack rate and I want it!

Oh Ignorant One: Rack rates are the highest published rates a hotel has.

I work in revenue management at a Four Seasons hotel. Prior to Four Seasons, I worked at a Marriott brand and before that, a Hilton.<BR>Most of the perceptions here are incorrect.<BR>Many hotels manage inventory much like airlines. Our peak travel days are midweek so the rates increase. If you display leisure travel patterns in your booking you may be offered a great discount. My hotel is busiest Tues/Weds/Thurs night. You would find it very difficult to get a rate lower than 300/night unless you had a negotiated rate. My top corporate accounts are paying negotiated rates of 150-199/night during these peak days.<BR>If you are vacationing, arriving on Friday or Saturday and staying 4 days... even a week, you will get a break because you are bringing money into the hotel on low occupancy days.<BR>It's sort of like buying an airline ticket for a Tues/Weds business trip.<BR>The ticket will probably cost 4x what a trip that includes a Saturday night stay would cost.<BR>The only time our rack rates sell is when the city is extremely busy... think Mardi Gras or the US Open.<BR>Our corporate rates are about 10% less than rack, our "agency" rates (Amex) are about 10% below corporate and our negotiated rates begin at 10% below agency rates.<BR>Agency and negotiated rates are protected, and are available until the hotel sells out.<BR>Weekend and promotional rates are generally offered during LOW occupancy days and can be turned on and off at any time.<BR>Corporate travel departments/agencies typically save the corporation a significant amount. There have been many industry studies comapring agency secured "Average Daily Rates or ADR" to self secured discounted ADR.<BR>Corporations are smart enough to test the performance of their travel agency... some of these companies spend over 100 million a year on lodging.<BR>

ttt

xxx, Does the Four Seasons even discount? I only ask this because my brother in law was organizing a Bar association meeting in NY last year and the 4S was his first pick. He called to negotiate a discounted rate and was told "Sir, we are the Four Seasons, we do not discount". We were actually laughing about it. They wouldn't budge on the price, even though he needed several hundred rooms. I think he ended up booking at the NY Palace.

Groups and meetings are a different game all together.<BR>Certainly most, if not all Four Seasons offer discounted rates to select customers. I am quite shocked that they said "Sir, we are the Four Seasons, we do not discount". <BR>That's not how we are trained... and to be quite honest, most hotels are no longer in the position to be so snobbish.

We couldn't believe it either, this was pre 9/11 though. But then again, my BIL might have sounded obnoxious to begin with, that wouldn't be out of the realm of possibility..

Being that I am in the hotel biz (group sales), I can truthfully say that NO hotel whatsoever will tell a meeting planner that they do not discount rooms. I would have your brother call the 4 Seasons headquarters and report this. Someone is costing the company hundreds of thousands of dollars. Also, NYC occupancy rates were going soft before September 11th.