How Much Is Too Much?

I am a regular reader of Hotel News Now. I count on this fine publication to help me stay up to date on trends, general industry news, and thought-provoking stories. One recent report did in fact provoke me.

Specifically, the August 24 edition contained a report filed by Dana Miller. It pushed several buttons that led me to write this comment.

The title of the report was “Don’t be afraid to take a risk with hotel rates”. The story suggested that hoteliers should not be shy about hiking rates until the reservation requests decline. An unsold hotel room is probably the best example of a perishable commodity there is. The problem I struggle with is the idea of only regarding my product as a highly perishable commodity. That is not the message I want to convey about the value of my product in my market. I am in the boutique segment, so my focus is on providing quality experiences rather than just a clean and safe place to spend the night. I believe that the “gouge as much as you can get by with” state of mind does not enhance the integrity of the service value of my business.

Travelers are not ignorant of the intentions and efforts to stick it to them when we think we have them cornered. They are painfully aware of being asked to pay drastically more even though there is no change in value for what they are buying.

I personally have lost my patience and respect for the demeaning American capitalist mentality of delivering the lowest possible value for the highest possible price as “just good business”. That practice might work in the short term, but people will remember when they encounter extreme examples of this. In my personal travels, I have written off hotels where I previously was a repeat guest when I encountered a price hike that was clearly opportunistic to the extreme. In fact, they may have done me a favor due to finding a better lodging option as a replacement.

In my business, I strive to find ways to wow my guests unexpectedly. I am not afraid to charge a rate that assures me a good return. That is my idea of “just good business”. If I am paying attention to my business metrics properly, I do not need to pay attention to what my neighbors are charging. That is their business and not mine. My responsibility is to be creative and innovative with how I frame my product, and how I attract the guest I want to serve. I really believe that month in and month out, year in and year out, this way of respecting and honoring my guests will earn more consistent profits than extreme rate increases in opportunistic instances.

There are countless ways for hotels to conduct business and earn a decent profit. I wish the best for all hotel professionals because it is a very challenging business. I hope these comments provide food for thought and maybe even a good conversation now and then.