Change in Hotel Pricing (Article)

[Guest 10cc]

This might be of use to some, especially as we enter the holiday travel season. Also I found it interesting that the major hotel chains are finally taking action. This can only be an advantage to many who travel.

 

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Hilton is latest hotel chain to say its own rates won't be undersold

By Marilyn Adams and Andrew Sherry, USA TODAY

Hilton on Wednesday becomes the latest hotel chain to take a stand against powerful Internet travel sites by guaranteeing that its own room rates won't be undersold.

Customers who book directly by phone or online with any Hilton property and find a cheaper price elsewhere for the same room will receive a $50 American Express gift check for personal use, and Hilton (HLT) will match the rate. Hilton's guarantee resembles those already announced by InterContinental (IHG), Starwood (HOT), Marriott (MAR) and Choice Hotels (CHH), which are encouraging travelers to book directly with the hotels.

 

Hilton's guarantee applies to rates found within 24 hours of the original reservation and doesn't apply to sites such as Priceline.com, where users bid on rooms at unnamed hotels.

 

"We want customers to know they won't find better rates elsewhere," says Tom Keltner, Hilton's president for brand performance.

 

Experts say hotel chains' best-price guarantees are a response to the threat posed by consolidators and e-travel agents, notably Expedia and Hotels.com, the two market leaders, both owned by Barry Diller's Interactive Corp.

 

E-travel agents negotiate rooms at a discount, often from individual and independently owned properties, then resell them at a mark-up. Hotel chain executives say deep discounts and large mark-ups commanded by intermediaries are taking profits from hotels.

 

"This isn't marketing," says analyst Henry Harteveldt of Forrester Research. "This is just short of war. The chains are telling the online travel agencies and consolidators to sit up and take notice. They will not be bullied."

 

Harteveldt says the challenge is for chains to persuade owners of their individual properties to stop selling deeply discounted rooms to online agents.

 

Hotel chains are taking steps to control those sales.

 

When Marriott announced its lowest-rate guarantee in November, it said it would make rooms available via Travelocity.com, but not other external travel sites. Hilton says the only external site it will use is Expedia.com.

 

In another defensive move, five major hotel chains have formed their own Internet site called Travelweb.com, which offers rates from more than 11,000 hotels. The site, owned by Hilton, Hyatt, Marriott, InterContinental and Starwood, follows the lead set by Orbitz, the travel site jointly owned by several major airlines.

 

Hilton owns nine brands, including DoubleTree, Hampton Inn, Embassy Suites and Homewood Suites. Only 10% to 12% of Hilton's bookings overall are currently done online, and 80% of those are done on one of Hilton's proprietary Web sites. But online bookings are rising fast. Bookings through Hilton's own sites have been growing annually by 35% to 40%.

[Paul Revere]

I think the hotel chains are finally waking up about online bookings, and of course they want customers to use thier own sites. However, I have found that the hotel owned sites, still aren't as sophisticated as some others, and they are not always truthful about availablity or pricing. I have often found rooms at sold out hotels, or better prices at other websites rather than the hotel sites. Even though the hotel sites garauntee the best prices, you can still often do better on the sites of discounters or aggragators. The other weakness in the low-price garauntee of the hotel chain is that usually the reservation is not changeable in any way. So unlass you are absolutely 100% sure of your travel plans, the low price is risky and comes with too many conditions for me usually.

[ted]

Hopefully they will clean up their act. I had a dispute this summer over a booking I made on either Expedia or Travelocity, I forget which. Anyway they didn't want to give me stay credit since it wasn't booked through their site. I pointed out to them that their site said they were sold out when I booked, when they obviously were not.

[Huey]

Guys when these hotels state they are sold out technically they are . What happens is, as I believe is mentioned in the article, sites like expedia buy blocks of rooms (thus selling the hotel out). Therefore, the only way to reserve a room is through these 3rd party sites.

 

It is very rare for a hotel to be at 100% aside from some special events .

[Prime Muscle]

I saw an ad for Hilton in the paper. Interesting point that thier guarantee excludes Priceline.com and hotwire.com. I've had great experience with both web sites and the prices were no where near what the hotel's website was offering.

[Guest 10cc]

I have used priceline for about 2 years and have not had any bad experiences. Unless I have to stay at a specific hotel I will continue to use priceline exculsively.

[FrancoDiSantisxxx]

Expedia

 

and some of the other sites like Orbitz, Hotel.com, QuikTrips, etc., do not ever "buy" rooms. It is the discounters, like Priceline, who actually arrange a selection of the less desirable rooms (near the elevator, handicapped, by exit stairways, ice machines, not recently remodeled, etc.) and a discounted rate, similar to short selling of stock. Other sites and business also purchase rooms and other travel related business, such as the air carriers, might also block out rooms, which might eventually be released. However, some of these rooms, particular the ones reserved and/or purchased at discounted rates by the airlines, are also less desirable rooms, such as by an elevator.

 

Finally, when a property states it is sold out on their web site, it is always helpful to contact the hotel 800 reservation number or to contact the hotel directly. Oftentimes, the hotel is merely holding reservations which are not prepaid and which may still be subject to cancellation. It really depends on how badly you want a particularly property.

[FrancoDiSantisxxx]

Hilton and Marriott

 

. . . unlike some of the other chains, which still want you to go to their propietary web site, will guarantee the lowest available rate whether the reservation is made on their web site, on the telephone (either directly at the hotel or through the nationwide 800 number for the chain). Obviously, this precludes travel agencies.

[BigK]

I check with Hotwire to establish a base price. Then I hit priceline with a bid about 20% less. It works alot of the time. You must be specific about geographical location. Also find that a 3 1/2 star on Hotwire equals a 3 star on priceline.

[Guest Utopia]

nice article

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"You realize that life goes fast

It's hard to make the good things last"

[Guest]

To get the lowest price possible when bidding on Priceline, I highly recommend checking out http://www.biddingfortravel.com first.

[BigK]

Thanks for the tip.