BER Flyer

@mikebor: whould you mind calling the general manager of my favourite Bora-Bora resort? The still want $ 900 a night for an over water Bungalow. At a 20% occupancy rate! I understand that they want the "riff raff" like me staying away from them - pure discrimination!
What you're describing is done by about 95% Hotels worldwide. Ever been to Shenzen/China? Even in the most quiet months the chain hotels over there charging more then any local can afford - for a reason.
And food for thought: if your hotel is lowering the rate to $ 59 what about those that could only afford $20 a night?

LondonElite

A basic rule of hotel economics is you never lower the room rate to buy in occupancy. Occupancy can change quickly but ADRs are more sticky, so when occupancy shoots back up, you can be stuck with lowers rates, thus hurting your RevPAR.

lamphs

I noticed this thread yesterday. I was walking around the Georgetown neighborhood of DC this afternoon, practicing social distancing of course, and thought of it. Setting the health issue aside for a minute, let's say I wanted to have a local vacation today and stay at the RC in Georgetown. Even with a fantastic discount, I'd have no incentive to stay as there is very little to do.

I am more curious whether or not some properties will have sales when this situation ends to incentivize folks to travel. Or will demand be so great, because everyone is cooped up, and rates will rise?

cfabar1

I did a quick look at hotels in Miami this weekend. Let me assure you, rates are WAY lower than they should be. Perhaps it depends on where your hotel is.

yorkboy24

If hotels lower their rates right now that would actually be irresponsible because it may encourage people to travel, thus help the virus to spread. Hotels should only be used by those who must travel, those who need to be in quarantine, health / key workers etc.

ALARISstl

I just looked at rates at a Courtyard for the last week of May and it is double the highest price I’ve paid there the previous dozen or so stays in the last two years. Same thing in middle of June. I get keeping it the same but double?

moondog

Perhaps their revenue magagent prioritising ADR over occupancy rate or maybe there is less competition?

clarkef

The bad element that I suspect that the managers are referring are sketchy, whether they are black, white or striped. The business model of a 4* hotel is very different than a roadside hotel.

4* hotel

• Requires credit card
• Allows room charges in excess of the authorized credit hold
• Smoking not allowed
• Generally quite and peaceful

Cheap motel, especially near airports.

• Smoking
• Does not require credit cards
• No room charges
• Prostitution is rampant
• Drug use by guests is rampant
• People hanging outside their room

Very different business models and the clientele have different expectations. And before someone says I am being stereotypical, Motel 6 has all but admitted such and is actively trying to rehab the image by new policies.

X-ON

My call would be when this is over the supply will come back to market faster than demand, i.e hotels are allowed to open up and people can fly again but are people going to do that immediately? In most cases no, the demand will recover with a lag and it might not recover fully, the supply given that not too many hotels have gone belly up will come back faster. This will create a pressure downwards on hotel rates, airline tickets etc.

longing4piedmont

oh. The gift of being able to read minds. Do you work for CNN?

carrotjuice

I do have a contrarian scenario to share.

In mid March I arrived in my hotel at NYC, having booked an 18 night stay where rates were generally $130-190 (differed by the day). On my day of arrival, the coronavirus situation hit the fan and Marriott had just announced its flexible cancellation policy up to 24 hours before checkin. I discovered the rates had been slashed to $70-110 range. After mentioning this to one of the managers, the hotel was kind enough to change my rates to the lower ones - even when they were not obliged to, and I had already checked in, furthermore it was a non refundable rate. I was grateful.

Didn’t notice any perceptible difference in the type of crowd who stayed there, in fact the crowd very quickly thinned out within the first week.

seawolf

Good to see hotel is accommodating in current situation.

This is exactly what my post #7 is referring to.

Lowering the rate is not going increase new bookings by much but it will just end up reducing revenue on current bookings.

TomMM

Your maybe they don't want YOUR business..

satx78223

Several Hotels I know tried to lower rates more than $20 or so, but it didn't help any. Some of it depends on what their compset is doing, but usually you can't increase demand with a lower rate, if there isn't demand to begin with.

With little revenue coming in, F&B outlets have closed, except for limited room service.

Once you have low rates out there, it's just that much harder/longer before you can raise them back up.

nall

Wouldn't you want a customer that pays you and never stays there?