Re: Above market hotel room rates

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On Wed, Mar 24, 2010 at 07:53:33AM -0700, Lou Berger wrote:

> AMS took over.  If the problem is really as you suggest, that rates go
> down from the time of contract signing to when the meeting is actually
> held, then this can be easily addressed in the contract.  If one had

When you book a hotel as part of a large group like this, you are
effectively participating in a futures market.  What you're asking for
is not to participate in a futures market, but for Hilton (or whatever
hotel) to agree to take all the risks and for you to get all the
benefit.  I think it would be insane for a hotel manager to agree to
that.

The walk-up rate is irrelevant to this discussion.  Hotel staff are
under enormous pressure when the hotel isn't booked completely to get
the rooms full, even if the room is rented for the night at an
enormous discount from average revenue, because an empty room means 0
revenue.  (There is, of course, a minimum, but it's really low.  When
I was an undergraduate, rather than working in a bookstore I worked in
a hotel.  I once rented a room for 1/10th average revenue, thereby
making our minimum occupancy for the day and earning great praise from
my boss who did not get chewed out about vacancy the next day.  This
was in February in Ottawa.  Nobody wanted to be there.)  By the same
token, of course, as the hotel fills up the rate goes up, because the
chances that someone will get desperate and need the room at whatever
price goes up.  The rate you get, therefore, when booking as part of a
group well in advance, includes a certain amount of money that amounts
to an insurance premium: you pay more in order to get the stable rate,
betting in effect that the hotel will fill up and you'd have to pay
rack rate to get a room.  If you don't want to take that bet, don't:
wait until near the meeting time and see whether you can do better.
I'm not much of a betting man myself, so I prefer the predictable
though slightly more expensive rate.  (None of this is to disagree
with the others who've pointed out how simplistic the walk-up
rate:conference rate comparison is anyway.)

Best,

A

-- 
Andrew Sullivan
ajs@xxxxxxxxxxxx
Shinkuro, Inc.
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