Hotel owner failed "how to keep a customer 101"

[sld72382]

We all heard of businesses willing to lose a big sale than eat a couple of dollars. Well I had one myself - A certain discount hotel chain.

This location, which is what we stay in every year in March for the a certain major car race, recently switched from corporate-owned to a private franchise.

I called a couple of months ago to reserve a room, only to be told the rooms are "locked out and can't be chosen right now." So I try again in two weeks.

Same spiel, only this time I get a desk clerk who I am used to dealing with, and I asked her why the new owner is doing this and to just be real with me.

She said, "The new owner is locking down those dates and not allowing us to select them just yet because he wants to wait and see what other competitors are going to charge for their rooms before setting the price."

Being that I can translate corporate speak, I said to her "In other words your new owner is waiting to see how much he can gouge potential customers just because it's race weekend."

"Pretty much," she says to me.

I booked a stay at [other hotel] as a Plan B, and a couple of days ago my dad called them up to see if the rooms are available. Yeah, they are now - for a price that's 40 percent higher than last year. My dad asked them if we could receive a break on the price, and they said "NO, it's race weekend." My dad even said that it doesn't even have to match last year's rates, it can match [other hotel's]. No dice still.

So we are staying at [other hotel] and this hotel is losing a customer just because their new owner is a shithead. Moral of the story: It's better to eat a couple of dollars, than lose a customer completely. A customer who's been staying at the location for over 6 years.

Oh, how much would he have had to eat if they matched the other hotel's rate? $36.

[Sarlon]

I live in a town about 35 minutes from a MAJOR race Nascar racetrack here in Tennessee, There are hotels around here as far as an hour and a half away that are booked not months, not weeks, YEARS in advance...

yeah....I've tried renting floor space no takers.

[bainsidhe]

Just playing devil's advocate, but unless you stay frequently, including on non-event weekends, there's no incentive for them to give a discount in order to keep your business.

[sld72382]

Just an FYI....

1. We used to be able to book the room 1 year in advance. This changed once it turned "private."

2. People stay at this discount hotel because all they need is a room and a shower after raceday and nothing more. The price the new owner set for the rooms make it way to close to a hotel right down the street that's MUCH nicer. If anything, someone needs to tell the owner that he's overcharging for the product he's selling.

[Ironclad Alibi]

We had to forego visiting my brother at Thanksgiving several years ago because the Marriott Courtyard hotel we usually stay at had doubled their rates in honor of the local college football game that weekend. Not that Marriott needed the extra money.

[Moirae]

Ok, I've worked in the industry for ten years, but honestly so what.

Its a special event. That means you pay special event rates. It doesn't matter if another hotel is $36 cheaper or not. Why? Because you can just go to the other hotel if its that important. In a destination market, and during a special event, the hotel won't care because they can and will sell your room to someone else for a higher rate. You are not owed a cheaper rate just because you've stayed there before.

Keeping your business doesn't matter because you are only one person. It only matters if hundreds of people are saying the same thing.

Its the hotel that has the power, not you. Yes, that sounds horrible but it is the way it works.

For example... During Superbowl in 2013, the hotel I was working with was charging $700 a night to some groups, $800 a night to other groups, and $900 a night to still others. When I was let go, they were charging $1000 a night for individuals. This is based on how many rooms are left, whats going on, and what other hotels are doing. There are hotels in the area that are charging $3000 a night and up and getting away with it.

What you paid last year at that time? It doesn't matter. That was then, this is now.

It sounds like the previous owner was charging too low given the pickup for that time period and thereby screwing themselves. It might be one of the reasons why it was sold (that they weren't making enough money).

Thats the way the industry works.

Think of it this way...

Lets say you go in to the grocery store. Now you know there's perishable goods there that will only last so long before they're no good anymore and useless. Last month, milk was $3.50. This month, its $4.00. You CANNOT go to the store owner and demand the lower cost just because it was that price last month. It doesn't work that way and the owner or store manager will likely just blow you off. They are not going to suck down the difference just because you don't like the change in price. Hotel rooms are a perishable good and only good for the night the guest stays, no other time. Rates change based on supply and demand.

The hotel has done nothing wrong and they will be perfectly fine if you stop coming there because someone else will take your place.

Oh and that desk clerk should get written up for saying that.

[Pagan]

Its a special event. That means you pay special event rates. It doesn't matter if another hotel is $36 cheaper or not. Why? Because you can just go to the other hotel if its that important. In a destination market, and during a special event, the hotel won't care because they can and will sell your room to someone else for a higher rate. You are not owed a cheaper rate just because you've stayed there before.

Exactly. I can guarantee you that hotel rates in Albuquerque tomorrow will be way lower than they have been for the last two weeks. But then, the Albuquerque International Balloon Fiesta just ended this morning. And a lot of those rooms are already booked for next year.

For example... During Superbowl in 2013, the hotel I was working with

2013? Do you have a time machine?

[Irving Patrick Freleigh]

Just an FYI....

1. We used to be able to book the room 1 year in advance. This changed once it turned "private."

2. People stay at this discount hotel because all they need is a room and a shower after raceday and nothing more. The price the new owner set for the rooms make it way to close to a hotel right down the street that's MUCH nicer. If anything, someone needs to tell the owner that he's overcharging for the product he's selling.

1. So what?

The hotel is now a franchise. The owner has every right to restrict reservations and charge what the market will bear for a room. You have every right to take your business elsewhere. The owner has every right not to care that you're taking your business elsewhere.

2. It's not overcharging if people are willing to pay what he's charging.

[Moirae]

Exactly. I can guarantee you that hotel rates in Albuquerque tomorrow will be way lower than they have been for the last two weeks. But then, the Albuquerque International Balloon Fiesta just ended this morning. And a lot of those rooms are already booked for next year.



2013? Do you have a time machine?

lol. Nope, Superbowl is in NOLA in February 2013. In fact, they are breaking Mardi Gras up for it. There's one week of Mardi Gras, then Superbowl, then Mardi Gras Week II (thats the week with Fat Tuesday).

We've known for a year those are the dates. The city is sold out for a long drive all around us. Even Baton Rouge is seeing pickup for it and thats an hour and a half away.

You should see next week. Its the Society for Neuroscience. Rates are around $300 a night and up. I think the Bourbon Street hotels are charging more around $1000 a night. Most of the city is sold out for that time period, so whats left is going for high rates.

[smileyeagle1021]

2. It's not overcharging if people are willing to pay what he's charging.

assuming people are willing to pay it repeatedly... if other hotels of higher quality are charging less it will not take long for people to stop going to his hotel and go to the superior hotels. Only time will tell though if he is overcharging or not.

[sld72382]

Oh and that desk clerk should get written up for saying that.

Why? For confirming my suspicions?

[Sapphire Silk]

Why? For confirming my suspicions?

Pretty much. How business decisions are made is considered proprietary information. For all she knew, you were a competitor scoping out her boss's intentions.

I see the same kind of thing here in my area twice a year, during the Furniture Market. Vendors and visitors have complained for years about the price gouging of the hotels and motels in the area. It's so bad, and the need for rooms so great, that a lot of local homeowners in my neighborhood rent out their homes for a week during Market.

Note I said their homes, not a room. The homeowner gets out for that week and stays where ever they decide to go. I know people who do this religiously twice a year: in that one week they can make double a mortgage payment and more, depending on how big/nice their house is.

Las Vegas started a Furniture Market to try and lure that business away, but the recession seems to have killed it, at least for now.

But on the defense of the hotel owners, most of them stay in the black because of Market.

[Moirae]

Panacea hit the nail on the head. The employee effectively betrayed the business by bad mouthing it to a guest. Employers really don't like that.

If you read some of my posts on here, I have had some real asshole managers/owners in the last couple years, and they have done some real sketchy things, but I'd never tell a guest that directly when I'm actually working there. I'd have been at the least written up for it, and more likely fired by at least one of them.

Now, if the employee was a former employee instead, they can say whatever they want and there's nothing an employer can do about it.

Yep, there's a significant part of the year when rates are about $59, $69, $79, or $89 a night. No one wants to come here during July and August (justifiably if you ask me) because of the hurricanes and nasty unbelievably torturously hot and humid weather. Even the locals just do everything they can to survive the summer. Most locals stay inside, come hell or high water, unless there's a hurricane, or they have to get groceries or go to work.

Mind you, I agree with you. The hotels here do charge too much during busy times. But here's the thing... they can and people will pay it. That's the whole problem with industry these days. Its not to be rude or anything, but they really have no reason to lower their rate for you because you will (no ifs, ands, or maybes) be replaced. They have nothing to worry about if they lose you because there's always more where you came from. Yes, they prefer to keep you, but not if it means losing money over it. It doesn't even matter if you tell all your friends and family never to come back, because its only a blip on the radar of the hotel.

They do it because they can.

I don't like it any more than you do, trust me.

[bhskittykatt]

Moirae has explained it perfectly.

If the new owner raised the rates and manages to sell out over the weekend, he's not charging too much. Room nights are worth as much as people are willing to pay for them. Rates change from year to year, week to week, day to day...some places even hour to hour. You sell them for what you can get for them. If a consumer doesn't like it, they can choose someplace else. As long as the hotel is filling up, the owner isn't going to care because he's just making up your lost business and then some.

Maybe he failed "how to keep your customer", but he sure aced "how to increase your ADR (average daily rate) and RevPAR (revenue per available room)", and that's the bottom line he's worried about.

[sld72382]

I was talking to my dad about this. Like others have said, the new owner will have no issues filling the place up during this weekend so he knows he can charge any price he wants....