Hilton HHonors - Government rates, really....??!

Hilton.com offers what all major hotel chains do: gov't rates for both federal & state gov't employees, plus sometimes their contractors. As an honest guy ;)< I regularly do not select this as I am employed privately. However, let's get real. Do we really think that a Hampton Inn in Podunk gets some subsidized rate from the state that Podunk exists in? No way. The US Govt also is not able or interested in sending some bailout money to Barron Hilton.

Instead, these are rates that Hilton feels they can profitably sell hotel rooms at, not wanting to lose the sizeable amt of room nights that any govt has to give. If we agree that all hotel chains are not selling at a loss, but instead at a smaller markup than what they'd be willing to accept under AAA, AARP, corporate rates, then why can't we feel comfortable asking to match this rate? My travels are substantial, and frequently to the same hotels. I've now evolved (or sunk to) the idea that gov't rates are the new starting point for room rate negotiations.

Anyone with strong opinions either way? Anyone who's worked in hotel mgmt that can shed some informed light on this? Thoughts? :-:

Federal government rates are established by the GSA. Hotels can either choose to sell rooms at that rate or not, and usually limit the number they will sell on a given night. There is no subsidy involved. They do it in order to capture that segment of traveler. It's as basic an example of supply and demand as you can get - there are lots of government travelers and hotels want their business, or at least some of it. It's not unlike airline yield management where they figure it's better to get some revenue than none. They could not afford to sell every room every night at that rate, and during peak times may limit the number of rooms available at the government rate, but over the long haul they do better selling the rooms at a government rate than not selling them at another rate.

So if you want to negotiate based on government rate, consider how many room nights you would produce versus how many government travelers the hotel is likely to serve, and adapt your negotiating stance accordingly.

Offering "Government Rates", AAA, AARP or senior rates is a common marketing tool used by some hotels in order to rent rooms. No endorsement is implied.

MisterNice

The govt rate can also be higher than other rates at the hotel. I attended a conference last month were the govt rate was 159 for the conference and the weekend rate was 79.

The govt rate can also be higher than other rates at the hotel. I attended a conference last month were the govt rate was 159 for the conference and the weekend rate was 79.

Almost everytime I've checked the Govt rate was higher than the internet rate - maybe I just pick the wrong places to go :-)

Federal government rates are established by the GSA. Hotels can either choose to sell rooms at that rate or not, and usually limit the number they will sell on a given night. There is no subsidy involved. They do it in order to capture that segment of traveler. It's as basic an example of supply and demand as you can get - there are lots of government travelers and hotels want their business, or at least some of it. It's not unlike airline yield management where they figure it's better to get some revenue than none. They could not afford to sell every room every night at that rate, and during peak times may limit the number of rooms available at the government rate, but over the long haul they do better selling the rooms at a government rate than not selling them at another rate.

So if you want to negotiate based on government rate, consider how many room nights you would produce versus how many government travelers the hotel is likely to serve, and adapt your negotiating stance accordingly.

Perfect type of info, I had no idea. Appreciate the summary.

The US Govt also is not able or interested in sending some bailout money to Barron Hilton.

What does bailout money have to do with gov't travel? Are you under the impression that gov't rates are a new phenomena, maybe somehow associated with the bailout? I think you are confusing a lot of things, none of which are really related.

AGS

SteveinSTL,
Government rates are important to govt. employees bc the rate offered is usually the maximum lodging rate the employee will be reimbursed for official travel. Of course, the employee can choose a less expensive rate, if it's available, to save the government money. Or the employee can choose a higher rate, and not be reimbursed for the difference.

Hotels will pull the govt. rates for a particular day as inventory dries up. It's not like with city pair airline contracts where (after the contract is signed with the federal government), the airline must sell any available seat at the contract rate to a govt. employee traveling on official business.

What does bailout money have to do with gov't travel? Are you under the impression that gov't rates are a new phenomena, maybe somehow associated with the bailout? I think you are confusing a lot of things, none of which are really related.

AGS

It was a joke, hence the reference to Barron Hilton.

I have worked for republican (and democrat) Administrations in both federal and state (CA) governments (Civil Service) and, ironically, what the government will pay goes up during republican Administrations. It really went up during the last one. And so did the hotel government rates. Not just Hilton's. Go figure...*

Anyway, I really thought that the OP was going to be about that - as subsequent commenters have observed - that Government Rates sure ain't what they used to be.....

And adding to what SeamusSA describes, these are market segments, each with its own fuzzy demand curve and demand elasticity. And remember that Defense is in there with the Government Rate.



* So my colleagues and I were trying to figure it out (some of us long ago - Reagan era - gummint employees, some current), and we surmised that the GSA might be more willing to point some more resources in the direction of the hotels in a republican Administration (see "Defense" above). And reason number two, actually part of #1, might be that they don't have anyone beating on them about it. Speculation, as these are technical people, not privy to the thinking of the political appointees who make such policy.