Oct192014

London hotel rates and competitive set hotel pricing

Making London hotels affordable is my objective for a seven night trip next month. This article looks at hotel rates and hotel competitive set pricing for London hotels among the major hotel chains. This week I will publish several articles about London and Dublin hotels.

London Hotel Rates and Competitive Set Hotel Pricing

There are distinct sets of hotel rates seen on Kayak.com when searching chain hotels in London and Dublin. Hotels with similar room rates are often part of a hotel competitive set. Similar class hotels in a limited range area tend to charge a similar rate so shoppers are not attracted to a lower room rate to one particular brand over another when booking rooms. The system is one hotels prefer since research shows lower room rates than other hotels in the competitive set is poor business practice with a reduction in revenue. Competitive set pricing in 2014 means hotels push rates higher and follow each other’s lead. In a popular place like London, hotel rates are sky high.

This article shows examples of competitive set hotel pricing. I limited my searches to major chain hotels in London. Filtering for hotel rates high to low revealed hotel pricing in London operates within small price range zones of hotels. The luxury hotels segment in London is $400 and up with a selection of chain brand hotels in the $400 to $450 per night range. Here you find InterContinental, Marriott and Starwood Luxury Collection. The next segment ranges from $320 to $380, where one finds more than a dozen brand names like Andaz, Hilton’s new Conrad St. James, Hotel Indigo, and a rare Marriott Edition London. The majority of this hotel competitive set is more narrowly ranged from $320 to $350 per night hotels.

Can Points Pave the Way to London Hotels?

Those are scary hotel rates in London considering a $300 to $400 per night room for seven nights is a $2,100 to $2,800 trip expense.

Five days ago I bought airline tickets for my wife and I to spend a week in London next month. Yesterday, I let my mind delve deep into virtual reality of travel planning as I booked hotels for our seven nights stay in London and five nights I will spend on my own in Dublin.

London is bloody expensive

Our London trip for seven nights is set by the purchase of airplane tickets and specific dates needed for lodging.

Hotel weekday rates in London for November 2014

Introduction to Hotel Rate Competitive Set Hotel Pricing

There is an industry practice in hotel rate pricing referred to as competitive set pricing. This means hotels in the same area price their rooms within a small price range to match the hotels in their competitive set. The effect is to make hotel rates nearly identical within the same competitive set. One chain does not have a great price discount over another chain’s hotel brand in the same competitive set. Hoteliers work together loosely to maintain rates within a competitive set and lift all hotels. Hotel industry research showed from 2001 to 2010 with the impact of 9-11 and the financial recession of 2008-09 that hotels in a competitive set that lowered rates to attract guests actually lost revenue through rate cuts.

Competitive set hotel pricing in London.

On Kayak.com I filtered over 2,000 London hotel listings for Hilton, Hyatt, IHG, Marriott and Starwood to reveal London’s competitive sets between different hotel chains.

One of the primary things I look for when booking hotels is an anomaly where there is a good value hotel at a discount rate. This happens when a hotel breaks from the competitive set pricing and offers lower rates than comparable hotels. London did not show these price discrepancies in my search. London has well-defined competitive set hotel rates within a narrow price range.

The London $400 Hotels Club

I skipped to the second page on Kayak.com for London hotels when sorted by price to reach the $400 hotels club. There are another dozen hotels in the $500 to $900 club. That is a demographic I skipped.

London Competitive set 400

There are more than 50 hotels in London priced over $400 per night for a midweek Tuesday and Wednesday in November.

The Kayak.com screen shot for the $400 Club shows a competitive set example with only a $15 difference between hotels in three different chains.

  1. InterContinental London Park Lane ($393) IHG Category 9 at 45,000 points.
  2. Park Tower Knightsbridge, Starwood Luxury Collection ($391) SPG category 6 at 20,000 points.
  3. Threadneedles, Autograph Collection ($389) Marriott Rewards category 8 at 40,000 points.
  4. London Marriott County Hall ($404) Marriott Rewards Category 9 at 45,000 points.

All four hotels are 5 stars and receive excellent ratings with hundreds of hotel reviews on TripAdvisor.com.

All these hotels are in the same luxury class competitive set for London hotels. I would only consider these hotels when burning points.

$320 to $380 hotel competitive set for London

The next visibly prevalent competitive set hotel pricing is the $320 to $380 range.  This set of hotels is loaded with name brand hotels and concentrated more in the $320 to $350 per night range for hotel rates at high end hotels in several major chains. Again, these hotels are ones I only like for points redemption value. These room rates are well outside my travel budget.

Hilton: Conrad London St. James $378 (formerly InterContinental Westminster) HHonors 80,000 points.

IHG: Hotel Indigo London – Tower Hill ($368) IHG Rewards Club category 9 at 45,000 points.

Hyatt: Andaz Liverpool Street London ($358) Hyatt Gold Passport category 6 at 25,000 points.

Marriott: The London Edition ($354) Marriott Rewards Category 9 at 45,000 points.

London 360 comp set

Other hotels falling in this set include:

  • Hyatt Regency The Churchill ($351) Hyatt Gold Passport category 6 25,000 points.
  • Hilton: The Trafalgar London ($348) HHonors Premium room 116,124 points (for dates of stay used for all other hotels in this survey).
  • London Marriott Grosvenor Square ($339) Marriott Rewards Category 9 at 45,000 points.
  • Waldorf Hilton London ($338) HHonors 60,000 points.
  • JW Marriott Grosvenor House ($337) Marriott Rewards Category 9 at 45,000 points.
  • Marriott: St. Pancras Renaissance ($331) Marriott Rewards Category 9 at 45,000 points.
  • IHG: Hotel Indigo London Paddington ($326) IHG Rewards Club 45,000 points.
  • Starwood: W London – Leicester Square ($325) SPG Category 6 at 20,000 points.
  • Starwood: Le Meridien Piccadilly ($321) SPG Category 6 at 20,000 points.

These are many of the top choices for hotels using hotel points in London. Most of these hotels are near the top of their respective categories in the hotel loyalty program.

Hyatt has only two hotels in London and both are 25,000 points per night. SPG charges 20,000 points per night for most London hotels. The three Starwood Hotels mentioned so far are all category 6 hotels.

Hilton has a few hotels at 50,000 points. Conrad St. James in Westminster near Parliament and Buckingham Palace is 80,000 points.

Hilton, Marriott and SPG offer 5th night free. A five-night hotel stay for one of these hotels is still going to be pricey in points.

  • Hilton 240,000 to 320,000 points for 5 nights.
  • Marriott Category 8 or 9 hotels are 160,000 to 180,000 points for 5 nights.
  • SPG is 80,000 points for five nights.
  • Hyatt has no discount for five nights and it will take 125,000 points for a Standard Reward at one of the two Hyatt properties in London.
  • Cash & Points reward nights are an additional option to check for reduced per night cash and fewer per night points.

The bottom line is London is bloody expensive whether booking cash rates or point rates at the high end major chain hotels.

$200 to $250 hotel rate competitive set

Finding rates in the $200 to $250 range per night range offers a different competitive set of hotels, with many hotels in this price range largely outside the center of London. Even at $200, seven nights in London jumps to a $1,400 lodging week.

London Comp set 225

  • Holiday Inn Regent’s Park ($230) IHG Rewards Club Category 7 at 35,000 points.
  • Holiday Inn Express London City ($226) IHG Rewards Club Category 7 at 35,000 points.
  • London Marriott Hotel West India Quay in the east London Canary Wharf and
  • DoubleTree London Westminster ($224). The rates are $50 higher at $274 after clicking through Kayak.com for DoubleTree. This hotel should be in the previous higher rate competitive set. HHonors 60,000 points per night.

Under $200 in London

Under $200 per night at the name brand hotels puts you at the airport or the outer rings of metropolitan London. Airbnb looks like a good consideration at these prices.

London comp set 170

  1. DoubleTree by Hilton London Chelsea ($182) Hilton HHonors 60,000 points.
  2. Holiday Inn Express London – Limehouse ($166) IHG Rewards Club Category 6 at 30,000 points.
  3. Holiday Inn Express London – Royal Docks ($161) IHG Rewards Club Category 7 at 35,000 points.
  4. London Marriott Hotel Twickenham ($181) Marriott Rewards Category 6 at 30,000 points.

In this competitive set the high price of reward nights makes it a tough choice whether to use points or pay for the nights. DoubleTree Chelsea is 240,000 points for a five night reward stay to save $910. That is a low redemption value for HHonors points.

Holiday Inn Express is a poor value at barely $5 per 1,000 points in IHG Rewards Club points.

Marriott Rewards offers far better value spending 40,000 points for Threadneedles, a $400 per night hotel rather than 30,000 per night for Twickenham.

What’s the Point?

This article looked at chain brand hotel rates for London for two midweek nights in November 2014. London is expensive for hotels. Most hotels in the upper upscale brands like Hilton, Marriott, IHG, Hyatt and Starwood are over $220 per night with many hotels in the $300 to $400 per night range.

Hotels in London are organized in competitive sets for room rate pricing. Different hotel chains have very similar room rates for similar hotel market segments from upscale to luxury hotels.

The best value using points in London is for the top hotels with ridiculously high rates in the $350 to $400 range. Hotels in the $160 to $260 range tend not to be very good redemption value for points since the hotels typically are also categorized near the top tier of the hotel loyalty programs and require a relatively high number of points compared to the room rate.

Club Carlson was left out of this analysis of hotel rates. Carlson Rezidor Hotels offer 18 Radisson Blu and Park Plaza hotels in  London. The next part of this look at London hotel rates and hotel loyalty points will show why Club Carlson is the best value for our trip to London next month.

*****

Ric Garrido of Monterey, California is writer and owner of Loyalty Traveler.

Loyalty Traveler shares news and views on hotels, hotel loyalty programs and vacation destinations for frequent guests. Check out current hotel loyalty program offers across all the major chains in Loyalty Traveler’s monthly hotel promotions guide.

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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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Comments

  1. Museums trips are the primary goal for London so the weather does not matter too much. I travel many places and in many of those places, locals recommend coming back in summer. I like to travel year round. Personally, I would not want to be in London in summer. Too many crowds and less hotel availability. Cities are the perfect place to travel in bad weather. Good weather is for country living in my travel life.

    I know very well the difference in a San Francisco visit when staying at SFO Airport and downtown. I would never recommend anyone to spend their big city trip at airport hotels. I have done this analysis before showing how much time is wasted commuting. I have been to London a few times and I have done central and the burbs. Definitely prefer central London.

    I noticed IHG has a couple of low category Wembley hotels that also have low rates. Good redemption value. But this is a trip to be in London and not the burbs. I selected three hotels based on their proximity to different London museums.

    I’ll show how Club Carlson provides incredible locations and points redemption value when I continue with my series on affordable London and Dublin.

  2. November is a fine time to visit London — the summer tourists have gone and the Christmas shoppers have not yet arrived.

    As you say (and will no doubt go into more detail on in a forthcoming post), Club Carlson is great for London — especially for anyone holding their US credit card.

  3. i’ll be in London, November. It is a good time. Fewer tourists. London is just an awesome place all year around.

  4. Great post. I’m looking forward to seeing where this goes. For a special trip, I would not recommend opaque bidding, but I’ve found London to be the best city for purchasing through Priceline or Hotwire. I’m sure you’ll come up with a better way, but I got the Marriott County Hall for $139 ($175 with taxes) for a Wednesday in September 2014 via Priceline, I think Express, with breakfast and, rather lousy, club access, honored as an elite. I genuinely liked the Park Plaza Riverbank, which is also in play via Priceline. I think I used Priceline Express there, as I was afraid of not getting free internet on a bid hotel and needed to work.

  5. I snagged a great rate, booked about 6 months ago, for the new Hampton Waterloo for 8 days this November. I’ll let you know how it goes, but I got it for 110 GBP per night.

    I was there last November as well (for yet another wedding – why do my friends keep getting married in November?) and found the weather to be cool and rainy but not horribly so.

  6. If there is any city on earth made for using Carlson points or IHG free night awards, it is London.

    End of story.

  7. Great Analysis. I’ll be there Nov/Dec.
    As an expat I used to do HH and SPG redemptions , plus a LOT of Priceline back in the day.

    Then along came Carlson….gamechanger.

    I now take advantage of F&F low cash rates, plus strategic points redemptions using the CC visa.

    Look forward to your CC analysis, see if it fits with mine and hopefully I can learn something.

  8. I would love to see a comparison of club carlson venues in London, especially Mercer Street and the Mayfair

  9. Checked Priceline bids for London on BiddingforTravel.com.

    There are several successful bids shown for Hilton properties and Carlson Rezidor Park Plaza.

    http://biddingfortravel.yuku.com/forums/105/England-London/England-London#.VEUw0PnF9qj

    4* Doubletree By Hilton London Victoria 9/28 $101
    5* Mayfair Hilton on Park Lane 10/18-10/21 $236
    4* Kensington, Hilton London Olympia, 9/2-5, $111
    3.5* Bloomsbury – Marble Arch Area for $96/night (express deal) – Oct 13 – Oct 18

    Priceline is my choice when there are no reasonable hotel alternatives.

    I’ll probably write articles on Priceline, Hotwire and Airbnb for London.

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