by Jim Rendon, Yahoo! Smart Money
1. “In tough times we have to discount — creatively.”
For the hotel industry, 2009 was the worst year since the Great Depression, and last year was only slightly better. At its low, the average daily room rate was $97, down from $107 in 2008, and occupancy rates fell below 55 percent. “This recession has been so traumatic across the board for all types of hotels,” says Robert Mandelbaum, research director at Colliers PKF Hospitality Research. In turn, hotels have slashed staff and cut corners. Michael Aschoff, a retired compliance officer from Tampa, Fla., stays in hotels 30 to 50 nights a year and has noticed they’ve stopped replacing soap and providing body wash and mouthwash. “They have really cut back on little amenities,” he says.
But hotels are holding the line on rates, says Travis Rank, director of worldwide sales at Best Western International. Instead, some hotels offer free parking, gift cards or other perks, like a free extra night for customers who book a certain number of nights in a row. Check hotel websites to find these deals — which are likely to be available until 2012, when the industry is expected to recover.
2. “Book with us to get an upgrade.”
When you book your room through a third-party site like Expedia (Nasdaq: EXPE – News) or Travelocity, the hotel typically pays a commission — up to 30 percent. Through their own sites, hotels will usually match the best rates and may offer specials, and many will let you change your reservation without penalty if you’ve cut out the middleman.
What’s more, book directly with the hotel and your “chances of getting an upgrade are vastly improved,” says Rank. Hotels also like to save perks for their loyalty-program members. Chris Jones, the general manager of Hotel Indigo in San Diego, says he gives upgrades to about 35 percent of customers, with priority going to loyalty-card holders. “The hospitality industry is all about relationships,” says Fredrik Korallus, executive vice president for global revenue generation at Carlson Hotels. “If you want something, it never hurts to ask.”
3. “We can be sneaky about our best deals.”
Since most hotels are franchises, individual owners offer the best deals. They’re promoted online, via e-mail newsletters and, more recently, through social networking sites like Facebook and Foursquare. Hotel Indigo had 500 followers on Twitter before it even opened, and Jones says last fall he offered $185 rooms to followers for $99 — and booked 45 rooms in two hours. Robert A. Rauch, a managing partner at a San Diego Hilton, says he offers time-sensitive deals and restaurant or spa specials online. Hotels also offer discounts through partners like Visa (NYSE: V – News) or American Express (NYSE: AXP – News), but since hotels aren’t always enthusiastic about those, “sometimes it takes some effort” to find them, says Matthew Stone, a professor of travel and tourism at Prince George’s Community College in Washington, D.C.
4. “Your room won’t really look like this.”
There are plenty of places to find reviews of hotels, from newspapers and magazines to websites with traveler reviews. But when you want to see what the room or the pool looks like, you often have to trust the hotel — which may not be trustworthy, says Eli Seidman, founder of travel site Oyster.com. There, Seidman posts a hotel’s image next to one taken by his own photographers to show readers how deceiving hotel marketing can be. “It’s pretty bad, in varying degrees, across the whole industry,” says Seidman. And when it comes to the description of the room, “the square footage is complete nonsense,” he says.
Most hotels are not out to actively deceive customers. “We want to ensure that the images are accurate,” says Jeff Wagoner, president of Wyndham Hotels & Resorts. But, he adds, “we have no specific written guidelines.”
5. “Kiss your credit card data goodbye.”
Hotels have become a favorite target for credit card data thieves. According to digital-security firm Trustwave, 38 percent of the credit card hacking cases it worked on in 2009 were in the hospitality industry — far more than any other industry the company works with. Hackers (usually organized crime outfits) access a hotel’s network by guessing the administrator password, then place malware on the network, which then transmits guest’s card numbers back to them. They can also steal other info about you — home address, phone number, license plate number — to aid in identity theft. Nicholas J. Percoco, director of Spider Labs, a unit of Trustwave, says he had his own card data stolen and used just minutes after he checked into a hotel last year. “It can happen really quickly,” he says.
“This has become a priority in the industry,” says Wagoner. “We are putting a lot of effort and energy toward data security.” His company, like others, has basic requirements in place that franchisees are expected to follow. Visa has also worked with the industry to improve its data security. And things are getting better: Percoco says the hospitality industry fell to become the second most targeted industry in 2010.
6. “We need locals as much as travelers.”
With fewer people traveling, hotels that have bars, restaurants, spas and golf courses have been forced to look closer to home for help making up lost revenue. At the San Diego Hilton, Rauch says, 60 percent of the revenue from the spa and 70 percent from the bar come from locals. “Hotels need to learn to become the hub of the community,” he says. Korallus says the majority of customers at the FireLake restaurant in the Minneapolis Radisson are locals, and Carlson Hotels is launching two new restaurants designed to attract more local business. Wyndham hotels that usually cater to business travelers have likewise sought to lure locals by offering discounted weekend rates. Indeed, much of the industry has worked to boost revenue this way, says Mandelbaum. And while it has helped, it has not made up for all the lost room revenue in the short term.
7. “We’ll happily waive that fee.”
These days airlines have found a way to charge for just about everything, but it’s a different story for hotels, which have been losing revenue from once reliable sources. At one time, people paid exorbitant fees to use the room phone; now everyone has a cell phone. Revenue from pay-per-view movies is down significantly now that people bring movies with them on their laptops. Looking to add revenue, hotels have upped staples like parking charges (up to $40 a day) and the mysterious “resort fee” that some vacationers have seen tacked on to their bills (as much as $30). “Hotels are desperate to leverage up these fees,” says Rauch.
The good news: Hotels are pretty open to negotiating or even waiving some of these fees, says Stone. Unlike the airlines, where just a few companies control the industry, the hotel business is made up of more individual owners who are desperate for loyal customers and who are competing against other hotels that may not charge these fees. Bottom line: If you don’t like a fee, ask about it.
8. “We can’t do much about bedbugs.”
Hotels are a perfect environment for bedbugs — lots of turnover and lots of beds. And it has become a big issue for the industry. According to the National Pest Management Association, 67 percent of the pest-control companies it surveyed have received calls to treat hotels and motels. Unfortunately, there’s really nothing hotels can do to prevent travelers from bringing them in, since bedbugs are tiny and can hitch a ride on clothes or luggage. “The key is to find it and treat it as quickly as possible,” Jones says.
Travelers can use BedBugRegistry.com or the iPhone app Bed Bug Alert to search for infested hotels but should take these sources with a grain of salt — the cases haven’t been verified and, even if true, may have been treated already. Your best bet: On arrival, check the corners of the mattress for bedbugs or the telltale brown spots they leave.
9. “We obsess over online comments.”
Traveler-review sites have become a powerful force in the hotel industry. Too many bad reviews and business may start to slide — a fact those in the industry know all too well. “We highly recommend that hotel managers keep up with what is being said about them online, and not only respond but rectify any issue the customer might have had,” says Wyndham’s Wagoner.
For consumers, these reviews are bringing changes for the better. Korallus says some of his hotels have begun opening their gyms an hour earlier, thanks to online comments. And Jones says he brings online comments into staff meetings: “The more feedback, the better.”
10. “You can make a killing on points.”
A few years ago, Dave Weinberg, a Maryland-based consultant who travels a lot for work, became a platinum member of Intercontinental Hotel’s Priority Club Rewards program — without spending much time at the hotel. He signed up for the branded credit card, then benefited from generous point offers. “All hotels are trying to lure in travelers with extra point offers,” he says.
“This is the longest period of sustained hotel promotions we’ve ever seen,” says Tim Winship, publisher of FrequentFlier.com. Hotels are offering double and triple points to those who stay with them. As hotel points rack up, Winship says, travelers might think about swapping hotel points for airline miles, since airlines are raising prices while hotel rates are likely to remain low in many markets. “The way things are going, airline miles have more real value,” Winship says.
