Luxury Hotels - who is paying rack rates at these places?

I am not a Communist and this is not a troll, BUT, the rack rate prices at the luxury hotels in most great cities are $600-$900 for a basic room. (Just looked up Four seasons- NYC.)

Are there that many people out there who pay those rates? Why do they spend this when I have had perfectly decent, central NYC/Paris rooms for less than $250. (Will be staying in the Essex House NYC next week for $202 a night)

How many of these rooms are being paid by their business or someone else?

This is not a rant on these prices,I understand they have to be super expensive due to real estate value.

I am not a Communist and this is not a troll, BUT, the rack rate prices at the luxury hotels in most great cities are $600-$900 for a basic room. (Just looked up Four seasons- NYC.)

Are there that many people out there who pay those rates? Why do they spend this when I have had perfectly decent, central NYC/Paris rooms for less than $250. (Will be staying in the Essex House NYC next week for $202 a night)

How many of these rooms are being paid by their business or someone else?

This is not a rant on these prices,I understand they have to be super expensive due to real estate value.


To answer your question briefly--yes. There are people who pay $600/600EURO for a room in New York and Paris.

You're right that the Essex House is perfectly decent and central; for some, having a five-star hotel experience is as important as the vacation/business itself. On the business end, if a self-employed entrepreneur is negotiating a deal worth millions to his company, a couple thousand out of pocket to ensure absolute physical comfort in his down time doesn't seem egregious. Regarding leisure travelers, I know plenty of people who get a great deal of pleasure out of a solitary weekend in a great hotel--eating, using the spa, decompressing, etc. Obviously, couples/honeymoon travelers' needs are similar.



Regarding how many of these rooms are corporate rates and how many come from out of pocket, I don't have an answer. Perhaps one of the travel agents on this board would have more detailed knowledge of the actual numbers.

For me, I like staying in a nice place. I wouldn't mind sleeping on a park bench, but I hate mediocre run of the mill hotels. I rarely stay in anything less than $500 or $600 a night. Sure there are cheaper places to stay, but I could live in a cheaper house also. I like nice accommodations whether I'm at home or on the road.

Occasionally when traveling on business, I'll stay at a cheaper place for image or availability reasons , but I always stay some place nice when traveling on my own nickel.

Are there that many people out there who pay those rates?

Maybe they skimp in other ways.....

http://www.flyertalk.com/forum/18712166-post681.html

Go out, make a few million, and then come back to report on your feelings then towards hotel bookings :D.

Although, ironically, despite having enough $m in the bank, in the example you gave I probably would have taken the Essex House at that price! I'm also sitting on a pile of Hilton points at the moment, so may do the new Conrad at Battery Park given the rooms are huge (although in Summer I always take a suite at Soho House for the pool).

People also splurge in different ways. One person may spend their spare cash on new handbags, another may pay for luxury hotels.

Numbered among my personal acquaintance are more than one person who does not care one whit about the price of anything. All that matters is what they want. I'm trying to get clients like this, but so is everyone else.

People also splurge in different ways. One person may spend their spare cash on new handbags, another may pay for luxury hotels.

Some people just really like hotels. It becomes as much of the travel experience as the destination itself.

Raffle's example is a good one. I use one high quality handbag that goes from day into evening. I have had it for 5 years and am just now considering replacing it. But i have a friend who has an expensive bag for every day of the month. She happens to think I am crazy for spending what I do on hotel rooms. Everyone is different. And no, it's not always about how much money you have. It's more about how you like to spend it.

Are there that many people out there who pay those rates? Why do they spend this when I have had perfectly decent, central NYC/Paris rooms for less than $250. (Will be staying in the Essex House NYC next week for $202 a night)

Mmm... same answer to the question, why pay much more for a BMW or a Mercedes when a Toyota or a Ford will be perfectly fine?


Some people just really like hotels. It becomes as much of the travel experience as the destination itself.

I guess I am one of them. Love Luxury hotel stays during leisure trips, and worse now starting to like resorts also. But then, I also travel frequently for business and on these occasions, I will definitely book value-for-money hotels that's still comfortable and have decent to good service.

http://www.flyertalk.com/forum/luxury-hotels/660610-luxury-hotel-links-post17122792.html#post17122792

Maybe they skimp in other ways.....

http://www.flyertalk.com/forum/18712166-post681.html
I'm not sure what to say other than, "That's incredible!"

As for the OP, since I pretty much only travel for leisure, and as others have said as well, staying somewhere nice is oftentimes just as important to me as what sights/activities/dining I'll be doing.

To answer your question briefly--yes. There are people who pay $600/600EURO for a room in New York and Paris.

You're right that the Essex House is perfectly decent and central; for some, having a five-star hotel experience is as important as the vacation/business itself. On the business end, if a self-employed entrepreneur is negotiating a deal worth millions to his company, a couple thousand out of pocket to ensure absolute physical comfort in his down time doesn't seem egregious. Regarding leisure travelers, I know plenty of people who get a great deal of pleasure out of a solitary weekend in a great hotel--eating, using the spa, decompressing, etc. Obviously, couples/honeymoon travelers' needs are similar.

$600 in midtown Manhattan is not a luxury property rack rate ! There are a significant number of people who have their assistant book them at the place they want to stay, never look at the bill and couldn't tell you what a given room costs.

Same thing for all the threads on FT starting with "who pays for domestic F?" The answer is many.



Regarding how many of these rooms are corporate rates and how many come from out of pocket, I don't have an answer. Perhaps one of the travel agents on this board would have more detailed knowledge of the actual numbers.

Are there that many people out there who pay those rates?

Yes.

Why do they spend this when I have had perfectly decent, central NYC/Paris rooms for less than $250. (Will be staying in the Essex House NYC next week for $202 a night)


Because they can.

Or.

Why not? Decent by whose standards, yours? What a trollerifique thread....

Because I know what room am getting, what will be in my room, what fruits and drinks I like in my room, my preferred tea, I know the people who work there, because they know what restaurants to reserve for me before my arrival...I know the quality.

Because I know what room am getting, what will be in my room, what fruits and drinks I like in my room, my preferred tea, I know the people who work there, because they know what restaurants to reserve for me before my arrival...I know the quality.

If you can tell me that there is an NY hotel that provides that level of service in that price range (if at all), I will be amazed...and then book it.

If you can tell me that there is an NY hotel that provides that level of service in that price range (if at all), I will be amazed...and then book it.

I can't really speak for New York as it's my hometown and I don't spend much time in hotels there, but I"ve received service almost to those standards at the Chicago Ritz-Carlton (Four Seasons), the Georgetown Ritz, and at the club floor at the Ritz in Boston. It certainly exists in comparable major American cities.

Many of us here don't just pay those type of rack rates - we often pay double or triple the rates OP listed to secure suites, villas and other high end accommodations at some of the world's finest hotels. Heck, even some "basic" rooms are over 1K USD/night.

Why?

Many have cited many good reasons already. For me it comes down to a combination of 1. quality of service 2. the experience and 3. privacy. In that order. IMHO, quality of service is the key factor contributing to these high rates and makes all the difference in the world to a luxurious stay.

Consider that there are plenty of beautifully maintained properties with fantastic amenities and decent rooms (ex: Grand Wailea on Maui). But would I consider this a 5* luxury hotel? Absolutely not. Sure the pools are beautiful and the beach is quite nice, but the quality of service and privacy are non existent when compared, to, say an Aman or even a FS or RC.

I'm the first to admit that pricing seems to go exponential when compared to the improvements in some of these factors, even service. Meaning of course that the delta in service doesn't necessarily scale linearly with the pricing. Often times at the pinnacle in any market, the pricing goes astronomical at the top and this often creates the exact situation that affords great service and ensures privacy. Intimacy is a by product often of the fact that there are just so few who can afford this kind of pricing.

Agree with the post regarding trying to explain why one would buy a high end German automobile vs a Toyota. If it isn't intuitively obvious, then it probably isn't worth it to you. Same goes for the luxury hotels of the world. This doesn't mean any one person is right or wrong or better or worse, just different expectations, different values and different desires in how to use our savings...

Agree with AI. For me aesthetics is a big part of it as well.

I can't really speak for New York as it's my hometown and I don't spend much time in hotels there, but I"ve received service almost to those standards at the Chicago Ritz-Carlton (Four Seasons), the Georgetown Ritz, and at the club floor at the Ritz in Boston. It certainly exists in comparable major American cities.

This is totally off topic, but I can honestly say that I have almost never had the fabled "we understand you like ABC, so we are just making sure you have it in your room" in any luxury hotel, and I am a repeat guest (like double digit stays) in some of the better hotels that are the topic of discussion on this board. I am usually lucky if they get the newspaper selection right based on whatever the CRM database says. The only exception is probably the Taj Palace Mumbai, where the club staff actually remembered breakfast preferences (but that was really one very keen staff person). Either I am doing something wrong, or this stuff is just marketing bumf. FWIW, I have stayed at the Georgetown Ritz (and other Ritz(es?)) on multiple occasions, and have not experienced terribly thrilling customer service.

This is totally off topic, but I can honestly say that I have almost never had the fabled "we understand you like ABC, so we are just making sure you have it in your room" in any luxury hotel, and I am a repeat guest (like double digit stays) in some of the better hotels that are the topic of discussion on this board. I am usually lucky if they get the newspaper selection right based on whatever the CRM database says. The only exception is probably the Taj Palace Mumbai, where the club staff actually remembered breakfast preferences (but that was really one very keen staff person). Either I am doing something wrong, or this stuff is just marketing bumf. FWIW, I have stayed at the Georgetown Ritz (and other Ritz(es?)) on multiple occasions, and have not experienced terribly thrilling customer service.


It's not off-topic, as the thread seems to be about value and quality of service received versus price paid.

At hotels that I frequent (and by this, I mean at least one stay every 4-6 weeks), I always have my "computer" preferences fulfilled upon arrival. I don't have any particularly outlandish requests--an extra set of toiletries, two set of plates and silverware, and a coffee maker generally--and these hotels meet these without me having to ask. Beyond this, if I have a routine at a hotel (come in on a Thursday morning for one night, repeated on a weekly basis, for example), the concierge will typically know if there is a restaurant that I frequent each time and take the liberty of making me a reservation in advance and letting me know when I arrive that it's booked if I want it. Again, this isn't over the top customer service, just nice attention to detail to save me a bit of time.

More importantly, as a repeat guest at a luxury hotel, the property will typically know what rooms I prefer (high vs low floor, specific view, etc) and block me in something to my liking. This likely comes down to forming good personal relationships with front desk staff (or club level staff, when applicable), who in turn will take the extra second to give my reservations personal attention in advance.

Really, really good service is about not having to ask for it. You're right that most of it isn't "terribly thrilling," but it's very personalized (in my experience) and efficient. Nonetheless, I agree about the newspaper bit...

It's not off-topic, as the thread seems to be about value and quality of service received versus price paid.

At hotels that I frequent (and by this, I mean at least one stay every 4-6 weeks), I always have my "computer" preferences fulfilled upon arrival. I don't have any particularly outlandish requests--an extra set of toiletries, two set of plates and silverware, and a coffee maker generally--and these hotels meet these without me having to ask. Beyond this, if I have a routine at a hotel (come in on a Thursday morning for one night, repeated on a weekly basis, for example), the concierge will typically know if there is a restaurant that I frequent each time and take the liberty of making me a reservation in advance and letting me know when I arrive that it's booked if I want it. Again, this isn't over the top customer service, just nice attention to detail to save me a bit of time.

More importantly, as a repeat guest at a luxury hotel, the property will typically know what rooms I prefer (high vs low floor, specific view, etc) and block me in something to my liking. This likely comes down to forming good personal relationships with front desk staff (or club level staff, when applicable), who in turn will take the extra second to give my reservations personal attention in advance.

Really, really good service is about not having to ask for it. You're right that most of it isn't "terribly thrilling," but it's very personalized (in my experience) and efficient. Nonetheless, I agree about the newspaper bit...

Hate to sound like a Communist or troller again but: what's the harm in just calling the hotel in advance and telling them in 2 minutes what you want?

Hate to sound like a Communist or troller again but: what's the harm in just calling the hotel in advance and telling them in 2 minutes what you want?

I don't know. What's the harm in spending extra $$ so you don't have to waste time telling the hotel what you want. Depends on your priorities.

Also have to be at at hotel where they have or will get what you want.

Hate to sound like a Communist or troller again but: what's the harm in just calling the hotel in advance and telling them in 2 minutes what you want?

Telling a hotel what you want will accomplish nothing if management is inept or simply doesn't care which is all too often the case.

Now that the OP's questions have been answered is this thread still serving a purpose?

Maybe they skimp in other ways.....

http://www.flyertalk.com/forum/18712166-post681.html

OMFG :eek:

Paying rack rate when there is no discounting (e.g. resort location) is one thing - paying rack when a large % of guests are on a discounted rate (e.g. FS) is maybe not so great.

Paying rack rate when there is no discounting (e.g. resort location) is one thing - paying rack when a large % of guests are on a discounted rate (e.g. FS) is maybe not so great.

Good point. Perhaps this is what OP was actually thinking.

The other nuance is that it seems somewhat wasteful to, say, book Aman direct when you can book through a Virtuoso agent for no added cost and receive the Virtuoso benefits. Often they are stackable with any packages or promos the property is offering. So.. why not?

Or sometimes you're just too drunk/lazy to call Virtuoso/Cent/whoever for a discounted rate when you feel like checking into MO after dinner at Masa, even if you live a few minutes away :D

Or sometimes you're just too drunk/lazy to call Virtuoso/Cent/whoever for a discounted rate when you feel like checking into MO after dinner at Masa, even if you live a few minutes away :D

Hahaha.. I see you book like I do. Always best last minute, and usually slightly under the influence of something - or someone.

Or sometimes you're just too drunk/lazy to call Virtuoso/Cent/whoever for a discounted rate when you feel like checking into MO after dinner at Masa, even if you live a few minutes away :D

which is why you should always ensure your Virtuoso Advisor joins you for dinner at Masa. ;)

This thread has cracked me up.

OP, if you work out the percentage of your yearly/weekly income and apply it to what the hotel rates you mention are it will be pocket change for some and too expensive for others.

If someone can stay in a suite at George V for a week for -5% of their weekly nett income, for example, it is a lovely jaunt.

I would never, ever stay somewhere that was out of my budget or would not stretch our current lifestyle budget for a stay in a hotel however nice it was; I am sure most travellers on these boards are the same.

It would be no fun at all.

C

I can't speak for the Western world, but here in China very very few pay rack rates.
For instance, in Ningbo, I signed a contract for 30 days a year at the Shangri La and received a 40% discount per stay.

This is just my rate to give to clients/friend and the majority of people receive some form of discount here since anyone could ask me, and I'll gladly give them this discount since it'll help me maintain 30 days minimum occupancy and you'll get the discount off the listed price.

In Shanghai it is similar and I have never paid full price for The Portman Ritz or the Shangri La for both business and pleasure.

If someone can stay in a suite at George V for a week for -5% of their weekly nett income, for example, it is a lovely jaunt.

I would never, ever stay somewhere that was out of my budget or would not stretch our current lifestyle budget for a stay in a hotel however nice it was; I am sure most travellers on these boards are the same.

It would be no fun at all.

C

I am perhaps younger than most other high-end travelers, but have high standards and enjoy staying at my favorite properties (and discovering new ones). Therefore I choose to spend a significant amount, perhaps most, of my discretionary income on travel.

While I would not describe my travel expenses as a 'stretch' of my budget, I definitely do prioritize travel over other forms of discretionary spending such as shopping, as I derive more pleasure from travel.

I don't believe that high-end travel is reserved for the wealthy. There is nothing wrong with people from all kinds of demographics aspiring to something better than average four star chain hotels and resorts. High-end travel is enjoyable for many people, including those for whom the cost is significant.

I suspect many on this form would disagree with your assumption that travel needs to be relatively cheap in order to be enjoyable. Many high-end travelers save and budget for their travel expenses.

On the business end, if a self-employed entrepreneur is negotiating a deal worth millions to his company, a couple thousand out of pocket to ensure absolute physical comfort in his down time doesn't seem egregious.

While I am not in the millions-range, I am a fairly paid software consultant and I was in London for a client onsite (for three months :/) and decided to take an admittance exam to a university in Edinburgh. So i take the train on a Friday night to Scotland, with the exam being on Monday. We are talking of the possibility that the difference between getting or not getting a good sleep for three nights changes the course of the rest of your life. Are you sure you want to check into a cheap but noisy hostel :) ?

Edit: but yes, no rack rate. I got a very sweet deal from hotels.com

I am perhaps younger than most other high-end travelers, but have high standards and enjoy staying at my favorite properties (and discovering new ones). Therefore I choose to spend a significant amount, perhaps most, of my discretionary income on travel.

While I would not describe my travel expenses as a 'stretch' of my budget, I definitely do prioritize travel over other forms of discretionary spending such as shopping, as I derive more pleasure from travel.

I don't believe that high-end travel is reserved for the wealthy. There is nothing wrong with people from all kinds of demographics aspiring to something better than average four star chain hotels and resorts. High-end travel is enjoyable for many people, including those for whom the cost is significant.

I suspect many on this form would disagree with your assumption that travel needs to be relatively cheap in order to be enjoyable. Many high-end travelers save and budget for their travel expenses.

MikefromTokyo, I agree. I am not assuming that you have to be wealthy to travel and stay in nice hotels. And I didn't mean to come across as a pretentious git. I apologise if I have...
I am just responding to the OPs assumption that $600 is a lot of money.
We are not ancient, I am 36, and we always are on the lookout for a great deal. I think most people are.
Our business often pays for our travel so it doesn't cost us anything as such. When we pay for our own expenses I evaluate what is important and sometimes we stay in a lesser property that suits us better. :eek:
Every person has different needs.
I think the travel is the important part, the hotels are just the chocolate sprinkles on the top.

I can't speak for the Western world, but here in China very very few pay rack rates.
For instance, in Ningbo, I signed a contract for 30 days a year at the Shangri La and received a 40% discount per stay.

This is just my rate to give to clients/friend and the majority of people receive some form of discount here since anyone could ask me, and I'll gladly give them this discount since it'll help me maintain 30 days minimum occupancy and you'll get the discount off the listed price.

In Shanghai it is similar and I have never paid full price for The Portman Ritz or the Shangri La for both business and pleasure.

Thanks! I will be sending you a PM next time I am headed to Ningbo if it is OK with you as a 40% discount is really good and the Shangri-La is much better than the Sheraton.

As some of the others have said (or hinted at), I think it's all a matter of perspective.

Why would anyone possibly pay $3000 for one night in a hotel room? The same reason they drive a $1m car and own a $3m house. For them it's not a huge sum of money compared to their income or net worth.

It would be no different to a university studnet riding a moped and staying in a backpackers or a guy on a medium income driving a Ford and staying in moderate hotels.

Whether or not they pay full rack rates or not is a different story. I like luxury hotels and have stayed in more than one room that had a rack rate in the four digit range but I don't think I've ever paid more than about $400 per night for a room. Why? I don't have to. If I can get a $3,000 a night room for $400 why would I pay rack rates? For others who have money to burn the convenience of just paying "whatever they ask" is worth the extra money, I guess.

I spend a lot of time in NYC and walk past the Essex House frequently. Have never been inside but I get a distinct feeling that the clientele there is (are?) not quite as polished as you will find down the block at the Ritz-Carlton. Makes me wonder if the same goes for the accommodations.

I have my own place in the city now, but prior to that, I happily spent the $895/night for a Central Park view room at the RC. As others have pointed out, for some, the hotel experience is an important part of the overall experience.

If you're looking for a slightly lower price point, I would stay at the Palace (51st and Madison) over the Essex House. jmho.

As for the rack rates though? No, almost nobody pays those prices unless it's a last-minute booking and the hotel is almost full. They're mostly for show, the highest possible rate that anybody could possibly pay. When you pull up the same hotel online, the real rate is typically 2/3 that at most.