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Old Jul 30, 2004 | 10:36 am
  #13  
dhuey
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The marketing term for this is price discrimination. RC knows that they can increase their volume by selling some guests $600 rooms for $400 with a free breakfast and other goodies. The problem is offering this discount discretely, so that those paying $600 don't notice and demand the same rate. Any hint of discounting is particularly dangerous for a luxury brand, since it might take some luster off of its sparkling image.

Enter AmEx Platinum and Centurion. RC can say that there is no discount here -- HEAVENS NO! We don't discount. Through our partnership with American Express, we are simply offering an upgrade to certain elite cardholders.

Extra business for RC, little cannibalization of $600 customers switching to the discount and RC preserves its luxury, we'd-never-discount image. Pretty smart move. I'll bet Four Seasons is concerned about lost business from this.
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