Hot Pocket

Hey folks. Just wondering if you have seen this phenomenon. Most commonly, what I see is a desirable property at specifically $251/nt mid-week.

Surely they are aware that the limit for many companies is $250/nt for most non-NY/SF locations..

If you have also seen this...

Do these hotels not want transient $250/day business? I have ended up staying at less desirable hotels solely because my travel software will accept $250/day but not $251

So my question is, is it strategy, ineptitude, or some other reason why so many rooms are offered at $251/night?

pWei

Have you tried AAA to bring it down a few bucks? Or some other discount code. It typically knocks off a set % off BAR so $251 can't stop them.

writerguyfl

As a former Revenue Manager, my vote is for "strategy". It almost certainly isn't "ineptitude", as revenue management software is exceedingly good in a normal environment. It only gets tripped up when unexpected things like severe weather or terrorism.

One of the other factors that most folks don't consider is that revenue management is about more than just room rates. Good software looks at room rates plus ancillary revenue. In the hotels in which I worked, room service was a big source of revenue. Our sweet spots were guests on corporate rates staying for 1 or 3 nights. Those combinations produced the most ancillary revenue. For whatever reason, guests staying 2 or 4-5 nights were far less likely to order from room service.

Without proprietary information from these hotels, it's impossible to know. But, I'd guess that the total room rate plus ancillary revenue for guests at $251+ is higher than $250 or less.

Hot Pocket

Ok, so it's no accident, the properties that advertise a $251 base rate really don't want the business that is capped at $250.

Assuming this is true...good luck to them.

No way I am alone in having a $250 US cap

mahasamatman

Maybe not alone, but I know I've never worked for a company with a hard cap.

Non-NonRev

The problem with this is that the hotel company and your company have a deal - the hotel company grants discounted rates in exchange for your company agreeing to buy xxx hotel nights per year.

If you book with a non-corporate rate code, your company does not get credit for the night for purposes of meeting the agreed-upon quota.

craigthemif

Some companies have hard caps, but why does the OP assume all companies choose $250?

Some have negotiated rates in certain markets and use that as a baseline. If you want to stay elsewhere, you can pay the difference.

Is your company so horrible that you are forced to a $250 cap and can't pay the $1 out of your own pocket (to get that $20+ value of HGP points?)

Hot Pocket

I'm sorry folks, I did a poor job initially of explaining the issue. Let me try again:

Like many others, my company uses Concur for travel bookings and we are required to use it. Within this system, they have set a soft cap of $250/night for non-premium domestic cities. Other companies may use $150, or $350, or whatever they choose, including no cap at all.

I can exceed the cap, but must include a justification. Unfortunately, "I exceeded the cap because I really like this particular Hyatt" is not going to fly with senior management.

So, I happen to see a lot of Hyatt hotels that are priced at $251/night. I may notice it more than others because I have to take into account my own $250/night limitation.

It just seems like odd pricing - since caps such as mine are likely to be round numbers ($250, $350, $400 etc.), why not price at $249 instead? Or $399 instead of $401? I have seen this so often that I think it has to be deliberate. It just doesn't make sense to me why a hotel would want to close off a group of potential guests, all for an incremental $1-$2 per night.

Someone mentioned why not just pay the couple extra bucks per night myself. I absolutely would - but the fact that $251 exceeds the cap precludes me from even being able to make the reservation.

In any case, this pricing makes no sense to me so I wanted to throw it out there to other Hyatt loyalists to see if others were in the same boat. Thanks to all who responded.

cdancer20

I saw a similar thing recently while booking a trip. Using my corporate rate put it at $1 above my city cap. So of course I had to bypass that hotel.

JackE

That makes sense for properties and dates that are expected to sell out. What would make that applicable when that's not the case?

Non-NonRev

OK, here is an off the wall theory.

I checked a number of US cities and noticed that, excepting NYC in non-summer months, the highest GSA federal government per diem rate allowed is exactly $250.

By pricing at $251, Hyatt can effectively exclude all federal government business at all continental US locations.

Government employees are far less likely to eat at the hotel and of course never spend on high profit things like spa treatments, cocktail lounges, etc.

Just a thought as to where an oddball number like $251 could come from.

Hot Pocket

Great insight, and your theory makes more sense than anything I could come up with. Thanks!

craigthemif

I didn't realise that Hyatt hotel owners are so fabulously wealthy and so close to 100% occupancy that they would choose to turn away guests willing and able to pay $250 a night just because they aren't likely to order spa treatments or room service. By that token, I should definitely be on a Hyatt blacklist instead of a well-treated Diamond member.

The only way I can see that theory making sense is if the government takes decades to actually pay the bill, but as far as I know we're talking about the U.S. and not Venezuela... And government rates are normally lower than those open to the general public so it must be a type of business that is attractive in general.

Perhaps it's not even the hotel itself playing games but the travel booking service fudging the numbers to move business in a certain better-remunerated direction. Are the public/AAA/etc. rates all above $250 as well?

What I think we can agree on is that corporate policies are quite often stupid and arbitrary. I've seen enough moans on FT where somebody with control over travel policies bans certain chains due to one bad stay...

serpens

Employees in the Department of Defense are required to apply for and use a government charge card for travel, and the employees are personally responsible for charges. If the government takes decades to pay, it is the employee who is stiffed, not the hotel. This is a great source of heartburn for many employees, as you might imagine.

MSPeconomist

Government rates and caps on reimbursement tend to be specific to the city and in some cases even to the area within a city metropolitan area. AFAIK government employees are allowed to stay where they want provided that they only seek reimbursement for the minimum of the actual amount paid or the government per diem lodging rate.