Apr232010

Hotel Flash Selling and Last Minute Rate Drops

Results from an American Hotel & Lodging Association (AHLA) indicate nearly 40% of hotels are using flash selling like last minute website sales, or Twitter and Facebook specials. I saw some examples of flash selling with Hyatt and Starwood hotels in San Francisco for this weekend.

Here is the AH&LA poll survey question:

Poll: A recent report described that hotels, airlines, and other travel suppliers are increasingly finding success in flash selling, or offering last minute deals in the form of emails or other means to fill unsold capacity – and more customers are purchasing such deals. Is your hotel increasingly using flash selling and has this method improved the filling of unsold capacity?

Results:               

  • 61% No flash selling tried;
  • 26% Flash selling has boosted last minute sales;
  • 13% Flash selling has not significantly boosted last minute sales.

I was finding all kinds of hotel deals on Twitter a few months ago, but then I hit follow on loads of people who were following me and the hotel deals now seem to be lost in the myriad of tweets on my page. I think I need to aggressively unfollow to filter my tweet follows back down to mostly hotels.

The problem I find with Twitter is not enough hashtags, #, are used in tweets to allow good searches. For example, if all hotel deals were labeled #hotel, then it would be easy to search for deals. But with only 140 characters to write for a tweet, labeling with multiple hashtag terms takes up the strictly limited writing space.

Question for the twitterati – I would love to learn about some good resources for tutorials on using Twitter and Facebook. Anyone have sites to share?

Hotel Rates this week in San Francisco

I like the case study method for analyzing hotel rates. I spent the past week studying room rates for San Francisco this weekend. I was struck by the high rates I saw for San Francisco hotels this Friday and Saturday April 23-24 when I started looking last week. The rates were generally low with Hilton and IHG all week, but the rates were quite high for Starwood and Hyatt hotels.

I noticed huge discrepancies between rates displayed on Kayak.com and rates displayed on the hotel websites during the course of the week.

Last Sunday I spotted several lower rates on Kayak.com compared to the Hyatt and Starwood websites. I clicked on several of the lower rates listed on the Kayak.com search results. The rates generally were incorrect on Kayak.com and came out matching the hotel website when I followed through a booking on Orbitz or Expedia.

I happened to find a $45 discrepancy for the Westin Market Street San Francisco between EasyClickTravel.com and Starwood. I applied for a Best Rate Guarantee (BRG). I applied for the wrong night. I resubmitted a second BRG for a different night.

The odd discrepancy was the standard room, called traditional at the Westin Market Street was not showing up on Starwood’s site. A higher category Deluxe room was the lowest room category bookable through Starwood for most of this week. The EasyClickTravel.com room was a standard room.

The responses from Starwood’s Best Rate Guarantee representatives were interesting. My first submitted claim was rejected. The response stated my claim was invalid since EasyClickTravel.com did not have a Deluxe room available on its website and only the Deluxe room was listed on the Starwood site for $143 . The fact that EasyClickTravel.com had a lower $98 standard room did not matter since the lower category rooms were not being sold on Starwood’s sites.

No problem. I had submitted that BRG claim for the wrong date anyway.

But it does bring up a lingering question of logical consequences since I book so many rooms using Best Rate Guarantee claims.

If this were truly a rational reason for rejecting a BRG claim, then what keeps the hotel from moving their lowest room category inventory to online travel agencies and charging more on their own websites for higher category rooms? This seemed to be the case with the Westin Market Street this week when standard rooms were available through several online travel agency sites but not on Starwood’s sites.

Turned out to be a moot point.

Twenty minutes later I received a second email from a different Starwood Best Rate Guarantee specialist who approved the second submitted claim for the night I actually wanted. I got the $98 room and 2,000 points.

Then the hotel rates suddenly dropped yesterday for this Friday and Saturday.

Hyatt Regency San Francisco on Monday $200+; Thursday ($159 AAA with breakfast)

Grand Hyatt San Francisco on Monday $179; Thursday ($116 AAA)

Le Meridien San Francisco on Monday $199; Thursday $109 Starpicks prepaid rate

W San Francisco on Monday $219; Thursday $149 Starpicks prepaid rate

Westin Market Street $159 Monday; $114 Starpicks rate for the “traditional” room. Suddenly Westin Market has traditional rooms for sale after only offering Deluxe rooms all week.

The other interesting fact is the OTAs have not lowered their prices for the weekend.

Orbitz is charging $139 for Westin Market Street – Starwood is $114.

Expedia is charging $189 for W San Francisco – Starwood is $149.

Orbitz is charging $199 for Hyatt Regency San Francisco with a $25 Food & Beverage Credit– Hyatt is $169.15 (AAA with breakfast for two at hotel restaurant).

Orbitz is charging $199.01 for Le Meridien San Francisco – Starwood is $109.

There has been a growing clamor among big-chain hoteliers that online travel agencies like Expedia and Orbitz are playing too large a role in dictating room rates. I cited an article earlier this week arguing room bookings over the internet through third parties like Expedia, Orbitz, and dozens of other online travel agencies cost hotels about 8 times more than direct booking through hotel websites.

Hotel revenue is the largest proportion of OTA profits for the big companies like Expedia.

Too bad the San Francisco hotels waited so long to drop their rates this week. They would have taken in more money from me, but I already went for the bonus points of a Best Rate Guarantee due to the lower rates with the online travel agencies much of this week.

The point to take away from all this is keep an eye on hotel rates as you go for the free night promotions these next few months. Hotel revenue management tactics mean you will see highly dynamic room pricing. Getting the best room rate deal is really a matter of timing and luck.

About Ric Garrido

Ric Garrido of Monterey, California started Loyalty Traveler in 2006 for traveler education on hotel and air travel, primarily using frequent flyer and frequent guest loyalty programs for bargain travel. Loyalty Traveler joined BoardingArea.com in 2008.

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