Misuse of Corporate\Discounted Rate Codes
Aug 8, 2006, 6:51 pm
#76
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Very good thoughts from all on this topic.
socrates gave some good information as to the thoughts behind how it can be detrimental to both the company and the hotel - primarily displacement of rack rated business. Maybe this example might help.
Say company XYZ wants to shift their entire room business to my hotel, and let's say their potential (and historical) volume produces 10k room nights per year (for this hotel). That is some significant buying power when viewed just from room night consumption. However, if 90% of their room night volume falls on a Tuesday or Wednesday evening (the two most traveled days in the US), then it might not be wise to enter into a significant rate agreement with said company since it would displace a great deal of higher rated business due to the demand for those two evenings. Another company may approach the hotel with only 1k of room nights and receive a better deal, since their 'stay' pattern is arriving on a Sunday and checking out on a Friday (they pick up 'shoulder' nights in most markets being Sunday and Thursday). If every Tuesday and Wednesday were always going to be 95 degrees outside, your lemonade stand would most likely not want to give a great discount since they only have 100 cup's worth in their pitcher, unless the buyer were also buying on the colder weathered days of Sunday and Thursday..
It all depends on the hotel, local demand and supply, etc. Back to the point, if the company has negotiated a LRA agreement with a hotel based on their stay pattern (both historically and projected), then yes, extreme abuse of it does jeopardize the company's ability to renegotiate their rate rate for the following year.
No SkiaDock - I have not alerted the hotel in question in regards to lack of availability of the public rate you mentioned. No need to tell them - I am sure they were already aware of their procedures both past and present. My goal is for partaking in this forum is not to oust people at all - quite the contrary. I only want to lend help or guidance to our best guests from a property GM viewpoint, as well as to learn more about my MRWD members thoughts to better guide my team in delivering better service for you (and all guests for that matter).
Hope this answers some of your questions. Thanks.
socrates gave some good information as to the thoughts behind how it can be detrimental to both the company and the hotel - primarily displacement of rack rated business. Maybe this example might help.
Say company XYZ wants to shift their entire room business to my hotel, and let's say their potential (and historical) volume produces 10k room nights per year (for this hotel). That is some significant buying power when viewed just from room night consumption. However, if 90% of their room night volume falls on a Tuesday or Wednesday evening (the two most traveled days in the US), then it might not be wise to enter into a significant rate agreement with said company since it would displace a great deal of higher rated business due to the demand for those two evenings. Another company may approach the hotel with only 1k of room nights and receive a better deal, since their 'stay' pattern is arriving on a Sunday and checking out on a Friday (they pick up 'shoulder' nights in most markets being Sunday and Thursday). If every Tuesday and Wednesday were always going to be 95 degrees outside, your lemonade stand would most likely not want to give a great discount since they only have 100 cup's worth in their pitcher, unless the buyer were also buying on the colder weathered days of Sunday and Thursday..
It all depends on the hotel, local demand and supply, etc. Back to the point, if the company has negotiated a LRA agreement with a hotel based on their stay pattern (both historically and projected), then yes, extreme abuse of it does jeopardize the company's ability to renegotiate their rate rate for the following year.
No SkiaDock - I have not alerted the hotel in question in regards to lack of availability of the public rate you mentioned. No need to tell them - I am sure they were already aware of their procedures both past and present. My goal is for partaking in this forum is not to oust people at all - quite the contrary. I only want to lend help or guidance to our best guests from a property GM viewpoint, as well as to learn more about my MRWD members thoughts to better guide my team in delivering better service for you (and all guests for that matter).
Hope this answers some of your questions. Thanks.
Aug 8, 2006, 7:50 pm
#77
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That was a very helpful post. Thanks
Aug 8, 2006, 8:01 pm
#78
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Originally Posted by Marriott_Guy
I only want to lend help or guidance to our best guests from a property GM viewpoint, as well as to learn more about my MRWD members thoughts to better guide my team in delivering better service for you (and all guests for that matter).
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Aug 9, 2006, 3:39 pm
#79
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Originally Posted by longing4piedmont
Ok. Since you brought it up, here goes.......
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Aug 10, 2006, 12:22 am
#80
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Originally Posted by Marriott_Guy
It all depends on the hotel, local demand and supply, etc. Back to the point, if the company has negotiated a LRA agreement with a hotel based on their stay pattern (both historically and projected), then yes, extreme abuse of it does jeopardize the company's ability to renegotiate their rate rate for the following year.
- 01-10 rooms booked per day: 80EUR
- 11-20 rooms booked per day: 110EUR
- more than 21 rooms booked per day: regular rate, e.g. 150EUR
If many people that are not entiteled for the rate code are fast and book the 80EUR rate, the company will pay much higher rates than planned and the company has higher costs. The company may decide to choose another hotel (in order to avoid to book the regular rate or in order to negotiate a new contract with another hotel the next year).
Aug 11, 2006, 12:26 pm
#81
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Originally Posted by socrates
As each year passes by I'm suprised it hasn't happened yet but IMO until another upper upscale chain scale chain starts giving it away no one will
Aug 11, 2006, 1:14 pm
#82
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Originally Posted by Tiojelly
While companies are inventing charges such as "Resort Fees" (which Marriott fortunately does not try to perpetrate on us
According to this, Marriott settled a class action lawsuit as to no-notice resort fees a few years ago: http://www.lawcash.com/attorney/2538...al-lawsuit.asp
Aug 11, 2006, 1:27 pm
#83
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Wow...long thread. I agree with the basic premise that you shouldn't use corporate codes that you have no right to use.
The only grey area there is when you're a vendor: most big corporations say "Vendors must use our preferred hotels and rates or we won't reimburse." Some hotels say "We must see ID from that company." So, I pick places that will accept the codes that I'm required to use - but not ask for ID. Marriott falls in this category.
To the point about the rate itself, it's not that the corporate rates are all that good. In fact, the corp rate I'm using these days at Marriotts is frequently higher than the best available public or promotional rate. But I have to book it through their travel agent software or I have problems getting reimbursed, so I just grin and bear it. More MR points for me, I guess...
The only grey area there is when you're a vendor: most big corporations say "Vendors must use our preferred hotels and rates or we won't reimburse." Some hotels say "We must see ID from that company." So, I pick places that will accept the codes that I'm required to use - but not ask for ID. Marriott falls in this category.
To the point about the rate itself, it's not that the corporate rates are all that good. In fact, the corp rate I'm using these days at Marriotts is frequently higher than the best available public or promotional rate. But I have to book it through their travel agent software or I have problems getting reimbursed, so I just grin and bear it. More MR points for me, I guess...
Aug 11, 2006, 1:30 pm
#84
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Perhaps off-topic: mandatory "resort fees" should be illegal, period. Seriously: the State Legislatures in the places where this deceptive, unethical practice is rampant should specifically ban them. Hotels are welcome to set their rates however they like, but these fees are flat-out wrong. (I love a good resort-fee rant, even if the path that led to it was a little strange.)
Aug 11, 2006, 6:06 pm
#85
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Originally Posted by socrates
As each year passes by I'm suprised it hasn't happened yet but IMO until another upper upscale chain scale chain starts giving it away no one will
Aug 11, 2006, 8:26 pm
#86
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Marriott Guy, thanks for that update (I didn't want to do the quote the entire thing since Bruce prefers that we don't), but the one I'm referring to is where you explain the 10K room bookings, but not possibly wanting to give them Tues/Wed cuz they're high revenue.
And ignore the part I posted about you & socrates getting the LHR Ren publicly available (not to be confused w/ a corp code) promo tossed. I'm sure the hotel changes their promos periodically, and either raised the rate on this one or deleted it 'til slow season & probably a zillion other reasons.
Cheers.
And ignore the part I posted about you & socrates getting the LHR Ren publicly available (not to be confused w/ a corp code) promo tossed. I'm sure the hotel changes their promos periodically, and either raised the rate on this one or deleted it 'til slow season & probably a zillion other reasons.
Cheers.
Aug 12, 2006, 5:22 pm
#87
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Originally Posted by Kennewick Guy
Socrates...I appreciate all you bring to the Marriott board, but this has me stumped. If I understand this no one will be the first since everyone is looking around (seeing the revenue it produces) and saying "Not me!" If everyone is looking for someone to jump in I guess we are going to live with no break forever...
Mar 16, 2015, 4:10 pm
#88
Join Date: Mar 2015
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Use any discounted rate you can
I see no reason to stay at a lesser hotel or to be financially penalized because I work for a small company that Marriott cares less about. I do not see any ethical problem in fully taking advantage of another companies negotiated corporate rate.
1. These negotiated rates may be a violation of the Clayton Anti Trust act as there is no proven competitive situation the hotel was meeting yet they give discounts away.
2. These negotiated rates are a way of asking the consumer to subsidize large corporations. My $200 room and their $100 average $150 for the hotel. The hotel needs to average $150 to operate. But the consumer ends up subsidizing chase bank, bank of america, or Microsoft or staying at a lessor hotel.
1. These negotiated rates may be a violation of the Clayton Anti Trust act as there is no proven competitive situation the hotel was meeting yet they give discounts away.
2. These negotiated rates are a way of asking the consumer to subsidize large corporations. My $200 room and their $100 average $150 for the hotel. The hotel needs to average $150 to operate. But the consumer ends up subsidizing chase bank, bank of america, or Microsoft or staying at a lessor hotel.
Mar 16, 2015, 4:25 pm
#89
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I see no reason to stay at a lesser hotel or to be financially penalized because I work for a small company that Marriott cares less about. I do not see any ethical problem in fully taking advantage of another companies negotiated corporate rate.
1. These negotiated rates may be a violation of the Clayton Anti Trust act as there is no proven competitive situation the hotel was meeting yet they give discounts away.
2. These negotiated rates are a way of asking the consumer to subsidize large corporations. My $200 room and their $100 average $150 for the hotel. The hotel needs to average $150 to operate. But the consumer ends up subsidizing chase bank, bank of america, or Microsoft or staying at a lessor hotel.
1. These negotiated rates may be a violation of the Clayton Anti Trust act as there is no proven competitive situation the hotel was meeting yet they give discounts away.
2. These negotiated rates are a way of asking the consumer to subsidize large corporations. My $200 room and their $100 average $150 for the hotel. The hotel needs to average $150 to operate. But the consumer ends up subsidizing chase bank, bank of america, or Microsoft or staying at a lessor hotel.
Mar 16, 2015, 4:35 pm
#90
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I see no reason to stay at a lesser hotel or to be financially penalized because I work for a small company that Marriott cares less about. I do not see any ethical problem in fully taking advantage of another companies negotiated corporate rate.
1. These negotiated rates may be a violation of the Clayton Anti Trust act as there is no proven competitive situation the hotel was meeting yet they give discounts away.
2. These negotiated rates are a way of asking the consumer to subsidize large corporations. My $200 room and their $100 average $150 for the hotel. The hotel needs to average $150 to operate. But the consumer ends up subsidizing chase bank, bank of america, or Microsoft or staying at a lessor hotel.
1. These negotiated rates may be a violation of the Clayton Anti Trust act as there is no proven competitive situation the hotel was meeting yet they give discounts away.
2. These negotiated rates are a way of asking the consumer to subsidize large corporations. My $200 room and their $100 average $150 for the hotel. The hotel needs to average $150 to operate. But the consumer ends up subsidizing chase bank, bank of america, or Microsoft or staying at a lessor hotel.
There is just so much wrong with statement 2. A hotel is not going to take the chance at taking a loss on a room. They negotiate rates for a much smaller margin but with a guarantee that there will be a minimum number of nights booked in a year which in the long run makes it worth it to the hotel.
Last edited by Baze; Mar 16, 2015 at 6:29 pm