Hotel deals? Do the math

I recently stumbled onto a report I dubbed "Hotel Confidential: What Innkeepers Won't Tell You About Pricing."

The report, in reality titled "Hotel Revenue Management in an Economic Downturn: Results of an International Study," released this month by the prestigious Cornell University School of Hotel Administration, coaches hotel owners on how to weather the recession and keep most of us paying the highest room prices possible.

For travelers, reading it is like sneaking behind enemy lines.

A key piece of the report's advice to innkeepers: Don't cut room rates across the board because, in the long run, it hurts business. It won't fill that many more rooms, and it may damage your hotel's image.

Instead, the report suggests, owners can slip discounted room rates into packages that "disguise" them.

From whom? From us, of course.

"Bundling makes it difficult for customers to determine the prices of the individual components," the report says, citing examples such as "stay two nights, get another one free" and offers that combine the room with spa treatments, Wi-Fi or other services.

When such packages contain room discounts, they can save you money. But they don't always do that. Some pitfalls to watch for:

Not-so-free nights: It's easy to find packages that are not what they're cracked up to be. After a few tries, checking out news releases and Google searches under "free nights hotel," I came across this from the US Grant, a historic hotel in downtown San Diego:

Under "Free Nights: Linger Longer with Complimentary Nights," the hotel's website offered a three-night total of $478 plus taxes, based on a rate of $239 per night the first two nights and a free third night, for a Sept. 18 to 20 stay. Above the total, the screen displayed "$717," with a strike-through line, implying I would save $239.

But when I repeated the search on the website without the extra-night deal, I found a rate of $160.30 plus tax per night, or $480.90 for three nights, for the same room and dates. So I would actually save less than $3 with the deal. (Both rates were nonrefundable, and both had similar restrictions.)

Mysterious math: Savings on some other hotels' offerings were debatable.

On its website, the Hotel Monaco Denver, for instance, pitched a "Get Your Green on" package that included a room, overnight parking for a hybrid vehicle, reusable shopping bag, reusable water bottle, sunscreen, trail mix and a trail map.

The package cost $189 plus tax for Sept. 18, when the lowest room-only rate shown was $144, or $45 less. With parking at $28 a night, the package would leave me paying $17 extra for a passel of hard-to-price niceties.

Pelted with packages: Click on "Special Offers" or similar buttons on some hotels' websites, and get ready to duck.

Besides a free-night deal or two, the website of the US Grant, for instance, spooled out suite upgrades, two types of AAA discounts, bed-and-breakfast packages, rooms with baseball tickets and more -- about a dozen offers in all.

Checking dates and room types against the offers could take hours. It's like shopping mattress sales where each store carries different models and with the same effect: It's nearly impossible to tell if you're getting the cheapest deal.

Best available rate -- not: Despite its name, the "best available rate," a standard offering on websites of big chain hotels, isn't always the best deal. Typically it's just the lowest refundable room rate.

The website of the US Grant hotel, for instance, displayed several rates that were $21 to $78.70 less per night than the $239 best available rate for the dates and room type I checked. All the lower rates were nonrefundable.

The $144 rate I found on the Hotel Monaco Denver's website, dubbed "Stay and Save," was described as "save up to 25% off our Best Available Rate," shown as $169. This $144 rate was refundable, as was an even lower rate, $128, for a package dubbed "Stay and Save Plus," which included a choice of a cocktail or continental breakfast.

So are "bundling" and "packaging" deceptive? I asked Sherri Kimes, the professor who wrote the Cornell University report.

"That's hard to answer," she said. "I wouldn't call that a deception if the customer is still getting a deal because of the bundle."

And in fact, I did find deals, such as a seventh night free at the Grand Wailea on Maui, that really did produce savings, in that case amounting to $369 or more.

You just have to dig to hit the pay-less dirt.

Note: To read Kimes' report, go to search/chr/pubs/, and click on "Reports," then "2009 Reports." You have to register with the site, but it's free.


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