Why Do Hotels Have So Many Prices?

Why Do Hotels Have So Many Prices?

dear roxy

Dear Roxy is Sharing Travel Experience’s newest columnist. Roxy has over two decades of hotel front desk experience.  

She will be answering your questions about getting the best value and best experiences during your next hotel stay.

Today, Roxy is talking the topic of varying hotel rates and how to get the best deal. Got a hotel question? Just ask Roxy.


Q: Why do hotels have so many different prices on different websites?
Janice from Orlando

A: Hotels are trying to get as much exposure as possible online. (Who doesn’t like feeling exposed?  Uhm, don’t answer that.)

That being said, they are likely to be on as many booking sites as they can. In a perfect world, there would be “rate parity,” meaning all sites and the hotel would quote the same rates and discounts. Since we are not in a perfect world, the differences you see are a result of the conditions of these particular sites. For example, some websites have a “no cancel” policy. The rates they quote may be lower, but you will not be able to get out of that reservation. There are also fees and commissions associated with booking on these sites. If a site charges the hotels higher fees, the hotels will likely pass that increase on to guests through higher rates.

Of course here at STE, you can compare rates across multiple sites – which is probably why you had the question in the first place. 🙂

hotel priing
One Hotel Room, Many Different Prices

Q: All the “experts” say call the hotel directly.  So, I’ve tried that – and get a higher price than online.  What gives?
– Amanda in Redondo Beach

A: This is likely due to training; and that reservation agent is doing exactly what they were trained to do–get top dollar! Most desk clerks and reservation agents are trained using a “top down” method of quoting rates. This means they start at the top of the rate structure, rack rate, when quoting rates. If the reservationist detects resistance, they may point out some features at the property that makes that rate a good value. If you’re still not biting, they may then try to close the sale by offering a discount. Since hotel rooms are a disposable good, if they are not occupied on a particular night, they can never go back and re-sell it. So, it’s in the hotel’s best interest to take a hit on rate instead of letting a room go empty.

Your best chance at getting a discount when calling the hotel direct is to call at a more convenient time of day for the staff. If it is peak check-in/out time, they are more likely to route you to a call center. Some hotels use these centers for most, if not all, reservations. Those are professional reservationists; you’re not likely to get as good of a discount. But if you call at an off-time and ask to speak to someone in reservations at the hotel you should have better luck – politeness counts!

Q: When’s the best time to get a deal? Do deals fluctuate a lot?
Amy in Brussels

A: There’s no definite answer to this, because frankly, deals do fluctuate. Most hotels have a certain amount of rooms they allot for discounts. When they reach that threshold, the deals shut off automatically. To that end, it is good to book as far out as possible to get a deal.

On the other hand, rates have a lot to do with supply and demand. If it’s last minute and there isn’t much demand, hotels can’t reduce their supply. Now it’s basically a fire sale to get as many rooms sold as you can. If you know the date you’re looking to book is a busy day, book as soon as possible and don’t expect a deep discount. If it’s the middle of the slow season you may be better off holding out and calling the hotel direct.  Good luck!


Got a hotel question? Just ask Roxy.

Why Do Hotels Have So Many Prices?

Roxy

Roxanne ("Roxy") is the easily distracted, multi-tasking right brain of Fresh Air Lodging. After twenty plus years on the front lines of the hotel industry, she is now in search of socially responsible hotels and other businesses.

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