Posted by Ric Garrido

Yesterday a rate mistake of $60 per night for the Westin New York at Times Square was published on FlyerTalk and then re-posted on View from the Wing. That was a significant discount for a hotel with rates typically in the $400 per night range. The rate mistake was fixed yesterday and this deal is no longer available.

How many Westin Times Square rooms were booked at $60 per night?

Dozens, hundreds, thousands of rooms?

The Westin New York at Times Square with 863 rooms could probably accommodate several thousand $60 per night bookings.

I saw Gary’s post early enough to probably book rooms at that $60 rate. For my own reasons I didn’t even check for available dates.

Publishing Mistake Rates and Best Rate Guarantee Claims

Some of the comments on the View from the Wing blog criticize Gary Leff for taking a deal seen on FlyerTalk and reposting the offer on his blog. There is a bit of back and forth between Gary and his dissenters on whether his blog contributed to the deal ending more quickly.

I see nothing wrong with posting information from FlyerTalk, MilePoint and other points and miles blogs on my blog. The point of Loyalty Traveler blog is to share travel information to help travelers stay for less.

But I don’t publish hotel mistake rates on Loyalty Traveler.

BoardingArea.com helps me keep up on all the travel deals activity. I read about the airline deals, credit card deals, rental car deals and sometimes even shopping deals on BoardingArea.com even though I try and stick to hotel topics for my posts.

Gary posts many types of travel deals regularly. Many of them are deals I do not want to post on Loyalty Traveler.

Hopefully some folks read about this and will wind up with a good deal on a room in New York City as a result.

Gary Leff – Comment #39 View from the Wing

Hotel Mistake Rate: Westin Times Square New York for $60

Gary publishes plenty of great deals and that is one of the main reasons his blog is so popular. Most mistake fares are fixed within hours. That is the nature of the game.

Many people can thank Gary’s View from the Wing for some great vacation savings due to his posting on mistake fares and packages, like the February 2011 LivingSocial.com deal for Fairmont President’s Club Platinum membership for life.

 

Why I do not publish hotel mistake rates or Best Rate Guarantee claims.

1. Hotel rate mistakes are far less likely to be honored than airline mistake fares.

In my observations obvious hotel mistake rates generally are not honored. Only occasionally is the mistake rate honored or a higher rate, and generally still a good bargain rate, is offered to those who booked the mistake fare.

The main difference I think that makes airline mistake fares more likely to be honored is ticket prices fluctuate wildly among airlines and consumers have a valid reason not to know what the fair market value of a plane ticket is on any given day.  One day an airfare sale may offer a ticket for $200 that goes up to $600 the next day. The consumer is used to seeing really low rates for airline sale fares and it can be difficult to tell a mistake fare from a sale fare with airlines.

Hotel rate mistake fares are much easier to detect. Particularly when the mistakes are for a room like the W San Francisco 31st floor WOW suite at $15 per night when a standard room at the hotel is over $200 per night. That was a mistake rate I picked up in 2004 when the rate was supposed to be $1,500 per night for the WOW suite.

The W San Francisco is one hotel mistake rate I booked. In the years since I have been writing Loyalty Traveler blog my attitude to mistake fares with hotels has changed.

It has been about five years since I flew my last airline mistake fare with a $500 Delta Business Class roundtrip ticket from Buenos Aires to New York. 

The amount of money I have wasted on airline tickets getting gouged by ticket change fees leaves me with a different attitude for airline mistake fares.

I am more lenient in my ethics about airline mistake fares. Airline nonrefundable tickets are the only way the average traveler can afford to fly. Airline tickets that allow changes are exorbitantly priced. Once you have booked an airline ticket, you have usually made a nonrefundable purchase. Airlines collect significant revenue in fees charged for changes to nonrefundable tickets. The airline ticketing model is a consumer-unfriendly model of sales.

In contrast, hotels have low cost flexible reservation policies that do not force the consumer to book slightly lower prepaid, nonrefundable rates.  I don’t have the same urge to “stick it” to hotels in the way the airlines generate that feeling within me through their system of pricing and price-fixing airline fares.

2. Unlike airlines, hotel owners are often small business owners.

Starwood Preferred Guest, Marriott Rewards, Hilton HHonors and other loyalty programs are primarily contracted marketing services for hotels. Starwood Hotels, Hilton Worldwide, Marriott International primarily operate as hotel marketing and management services. These hotel companies do not own most of the hotels carrying their brand names. Best Western, Choice Hotels and Wyndham operate as franchise names offering hotel owners a recognizable brand name for their lodging product.

Back in 2008 when Wyndham Rewards offered a free night for a successful Best Rate Guarantee claim, the blog http://bestrateguarantee.blogspot.com/ published a Super 8 hotel in Monterey where one could invoke the Wyndham Rewards BRG claim for a free night.

The week before I had surveyed and photographed all the hotels on Fremont Street, Monterey and there was no Super 8 property. I drove over to the hotel later that day and saw a temporary Super 8 banner had been placed over the former hotel sign.

The small Super 8 hotel with about 20 rooms was faced with a situation of a large number of one night stays booked for a free room and likely a severe financial hardship for a small business just launching its rebranded hotel in Monterey.

The bestrateguarantee blog is still publishing BRG eligible rates, but the program has shifted to Choice Hotels (free night every 30 days) and Expedia ($50 future credit) after Wyndham Rewards shut down its free night BRG offer a couple years ago.

3. Computer errors and data entry mistakes result in hotel rate errors that are quickly manipulated by consumers in the social media world.

Assume the Westin New York at Times Square for $60 per night results in $300 lost revenue per night compared to the hotel’s normal published rate.

That is $300,000 in lost revenue in a few hours of mistake fare bookings if 1,000 room nights were booked during the $60 room rate availability.

Should a hotel take a $300,000 loss for a technical error resulting in a mistake fare and publicized in social media?

A $60 room night at the Westin Times Square is a great deal for the consumer.

But, is it good business practice for the hotel to honor the mistake rate or is it a flash mob social media mugging of the hotel when it was caught off guard by a computer hotel rate error?

Hotel Best Rate Guarantees

The power of my blog that I value is when I write a post that results in a change to more consumer friendly practices. Last month one of my blog posts resulted in Best Western management reviewing the Low Rate Guarantee practices to be sure their representatives approve claims made when a guest links through to Best Western from Kayak.com. I had a claim denied when linking to BestWestern.com directly from Kayak.com. A manager from Best Western International told me these types of claims should now be approved.

Invoking a Best Rate Guarantee claim is something I frequently do when traveling by using the hotel chain’s own low rate guarantee that their rate is the best I can find. I frequently find lower rates on third party online hotel booking sites and I claim free nights, points bonuses and rate discounts from hotel chains.

I do not share my Best Rate Guarantee claims on Loyalty Traveler since the rate is generally removed prior to or about the same type my claim is approved by the hotel chain.

Booking a large block of hotel rooms on an obvious mistake rate or Best Rate Guarantee claim rate is a financial hit to a hotel.

I don’t like to be part of that hotel mugging with Loyalty Traveler blog.

 

Should Westin New York at Times Square honor the $60 rate?

As I publish this post there has been no indication on FlyerTalk or View from the Wing whether the Westin Times Square hotel will honor the $60 bookings. It has been 24 hours since this mistake rate was available and the rate error fixed on Sunday.

I hope it works out well for all of you quick on the mouse with hotel reservations in your email inbox.

If this $60 rate holds, then Gary Leff will have even more readers for View from the Wing; readers watching his posts more closely for the next mistake deal or work around for a travel bargain. I wouldn’t have seen the Westin NY Times Square deal while it was active if not for View from the Wing blog.

 

Westin NY at Times Square Photos and impressions coming in September

Normally I could care less about New York hotel deals for my travels. The Westin New York at Times Square deal caught my attention since in a couple of weeks I’ll be at staying there.

My room rate is even better than $60 per night since I am staying free complimentary of SPG American Express and my SPG Amex Stars gig for the US Open tennis tournament.

And a Loyalty Traveler reader is 50,000 points richer from the SPG American Express 50,000 points giveaway last week for the US Open event. Looks like I will have an SPG points giveaway each month for the remainder of 2012.

The Westin New York at Times Square $60 room rate might be something I’ll bring up in SPG party talk during my stay in New York.

Loyalty Traveler original post link: http://loyaltytraveler.boardingarea.com/2012/08/20/why-i-dont-publish-hotel-mistake-rates/

Ric Garrido, writer and content owner of Loyalty Traveler, shares news and views on hotels, hotel loyalty programs and vacation destinations for frequent guests. You can follow Loyalty Traveler on Twitter and Facebook and RSS feed.

23 Responses

  1. are you reporting those SPG free stays as Income? If you are, how much are you reporting? If no, why not?

  2. I have a business contract with the parties involved and a business license.

    I follow IRS rules and pay my taxes.

  3. so, you are paying taxes on the Fair Market Value of the hotel room you get from SPG and US open tickets?

    at $400 a night thats a lot of taxes to pay. not mentioning the taxes on suite at Arthur Ashe.

    see you in flushing, I’ll be sitting out in the lower promenade.

  4. Point (3) is the same for a lot of mistake fares like the 4-mile fares on United. But I agree with the logic that hotels are likely to suffer greater impact due to their smaller size and franchise nature.

    I’ve never filed for a BRG. In fact, I don’t think I’ve ever complained to a hotel at all and asked for compensation. But I do it all the time with airlines. If they want to make the game complicated, I’ll use their rules against them. For the most part, hotels are one of the last arenas where the game is fair. Just play nice.

  5. I post these deals, and sometimes they work out. I’ve personally been able to stay in some amazing places I would never have been able to afford. I don’t feel most of the time that the travel provider has an obligation to honor them. But I do figure that if the deal IS going to be honored, then I would like to be one of the lucky ones that gets to go.

  6. @lu – I did not win a free room prize from Starwood. I perform services and I get compensated. Fair market value also applies to promotion services provided by Loyalty Traveler.

  7. Compensation is valued by the IRS most times by the FMV of the things* received.

  8. I started to write a comment explaining how the tax code applies to these sorts of things and then deleted it. Ric’s taxes aer none of our business.

  9. @Gary, are you are the same boat?

    just remember, the difference between avoidance and tax evasion is jail.

    why don’t anyone of you follow crankyflyer’s lead and disclose all your “freebies” http://crankyflier.com/ethics/ ?

  10. While I’m at it, should I also feel guilty about staying at a certain hotel almost exclusively using the points earned while paying for stays at another hotel of the same chain?

  11. @joe – I don’t get the point you are making?

    @lu – You seem overly interested in the aspects of complimentary travel associated with this blog.

    Here is what I get with the SPG American Express deal.
    - 2 nights at Westin New York + airfare from Monterey to NY. US Open tickets.
    - 2 nights at W Union Square, NY. NY Fashion show event. Economy airfare from Monterey to NY.
    - 2 nights at a Boston Starwood Hotel.
    - 2 nights at St. Regis Bal Harbour Miami + airfare.
    - 2 nights at St. Regis San Francisco.
    - 2 SPG suite upgrades.

    I mention in any blog post discussing a location or event if any tickets or flight or lodging was provided complimentary. None of the Starwood trips have taken place yet.

    My total freebies come out to about 14 free hotel nights, three domestic roundtrip airline flights and three events in the past three years. They were all disclosed at the time in my blog posts.

    Read the tax code on working condition fringe benefits for independent contractors.
    http://www.irs.gov/pub/irs-tege/fringe_benefit_fslg.pdf

  12. I’m not making a point, I’m asking a question. If I’m only using points for rooms at a hotel, am I hurting that hotel’s bottom line?

  13. @Joe: No, you are not, cause corporation compensates the hotel owner for this night. How much, depends on occupancy.

  14. Do they give you tickets to one of the early round US open games or one of the quarter/semi finals? I’d imagine the tax bill on the quarter/semis is pretty high as seats go for thousands.

  15. Ric- Good post. You deserve to be commended for your ethical (and practical) approach.

  16. @Joe – I have spoken to some hotel owners who speak poorly about loyalty programs and guests using points.

    That is the double-edged sword of loyalty programs for hoteliers.

    The loyalty program is an effective marketing device for hotels. For many hotels the loyalty program boosts average rates. The flip side is some very popular hotels get many guests booking on points.

    Research data indicates hotels aligned with hotel chain brands bring in more revenue per room on average than independent hotels. That is why so many hotels join loyalty programs.

  17. @Gary – I’d be interested in getting your insight on the tax code and these complimentary events and lodging. There are not many articles on the topic which is kind of strange considering thousands of bloggers and press journalists participate in events and free trips daily for their stories.

  18. @Ric happy to get into all the fun tax stuff offline if you want to drop me a note.

    @lu Whenever I’ve taken anything for free I’ve disclosed it. I tend not to take stuff for free though, sometimes it’s just the most convenient. Like when I went to the Citi Hilton Reserve launch event, I paid my own air and hotel but I did not ask them if I could reimburse cocktails. I had two gin and tonics I think. Or when I went up to meet with Starwood in advance of their announcement about new elite benefits this year — I paid my own air and hotel, got myself to their offices, but I did eat a sandwich in their conference room and they got me back from their office to the airport. When there’s free stuff on the table for me I usually just ask if I can give it away on my blog to readers instead.

  19. This is a bit OT but related to the previous comments. I searched a bit for taxation related to loyalty plan, and came across this website (http://www.lectlaw.com/files/tax17.htm)

    Can’t comment on the accuracy of the opinion expressed in the site. I did find it to be interesting and there’s an eye opener conclusion:
    “The Air Travel Arrangement requires the Taxpayer’s employees to return denied boarding compensation to the Taxpayer and, thus, satisfies the return of excess requirement of section 1.62-2(f) of the regulations with respect to those payments.

    The logic in the paragraph below makes sense:
    “However, because the Air Travel Arrangement allows employees to retain the purchase price adjustments, the arrangement does not require the Taxpayer’s employees to return amounts in excess of substantiated expenses and is, thus, a nonaccountable plan.”

  20. Westin Times Square apparently decided to honor the mistake rate.

  21. I’m not a tax expert, nor have I received free travel or hotel rooms as part of my business, but I am a small business owner. My view on the taxes would be that if Ric is receiving something that is essential to his conducting his business, then he could count it as income and then expense the same item. e.g. He received a night in a hotel room and transportation to that hotel room as income. To properly review that hotel, he needed a hotel room and transportation to it(and meals, etc. if over a certain distance from home) which are expenses.

    I expect an aggressive tax attorney would argue that the U.S. Open tickets are an income and expense also since he is doing a U.S. Open related promotion. A non-aggressive one would probably just declare them as income.

    If he received $5000 to do this promotion and then went and spent $5000 in travel and on hotel rooms to review hotel rooms, Ric would declare $5000 in income and $5000 in expenses. If part of that $5000 was for his wife, then part of it wouldn’t be deductible (or alternatively would be personal income) unless she was doing enough business stuff also.

    Talk to your accountant to be sure, but this might get you some understanding. I get the feeling lu is wondering how to do a travel blog and get free travel or write travel off.

    Back on topic… I agree that the punishment can be disproportionate to the perceived wrong on th eBRGs, etc. Though it is easy enough for the IT folks to have some simple checks in the system that would flag extremely low prices. e.g. if less that 70% of historical rate, reject unless forced. If less than 80%, just give a warning… That would easily be a selling point to owners/managers. And yes, I am a computer geek.

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