Re: Above market hotel room rates

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On 3/24/2010 8:36 AM, Andrew Sullivan wrote:
> 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.

yes but they do for their larger client's who regularly register for
these events. Especially in today's world where travel is much more
expensive for people to cover.

> 
> 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.  

Supply and demand is the key here.

> 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.  

Having run the bookings for the ABA's ISC for several years this is only
true of parties who have no clout. The bolt-on expenses cover the
operations and profit at the venues usually.

If the client is well respected we generally got the better rates or we
wouldnt use those hotels next year. I cant tell you what I paid the
Fairmont for meeting rooms - it would make you scream with the extortion
the IETF is subjected to, but hey I offered to help with these issues.


> If you don't want to take that bet, don't:
> wait until near the meeting time and see whether you can do better.

In Beijing this wont be a problem IMHO...

> 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
> 

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