A Buyer's Market for Hotel Rooms

When I was in college, the hotel industry went through one of its cyclic downturns, and my dad started a business managing hotels that had slid into bankruptcy. The hotels were often luxurious, with name brands you would recognize. There was nothing essentially wrong with them. Overbuilding and an economic downturn had left so few rooms occupied that it was difficult to make mortgage payments, payroll, and keep the lights turned on. My dad's job, as a court appointed receiver, was to use the financial wiggle room that bankruptcy provides to turn the hotel around and make it attractive to a new buyer. Dad, I know you're enjoying retirement, but it doesn't take a degree in Economics to realize that we're headed towards those times again... you might want to dust off that business license.

I posted last month about the amazing deal we got at our chosen resort in Phoenix, and now that we're here, it is interesting to see what is going on. For $72/night we were able to secure a two room suite in the Hilton Squaw Peak, a huge property with acres of swimming pools, golf, miniature golf, tennis courts and more. While it's certainly not the fanciest hotel in Phoenix, a recently completed $24 million renovation left the rooms and common areas sparkling. In fact, this is the exact resort AIG execs thought fancy enough for an indulgent post-bailout retreat.

Yet even at the fire-sale price of $72/night, the resort feels empty. We made several trips through the lobby last night, and the only guests we saw checking in were an airline flight crew... good business, but hardly the sort of free-spending tourists that a resort like this thrives on.

If you are able to travel now, there are unbelievable bargains to be had. As we were escorted to our room last night, my husband quickly realized that $72 had (rightfully) purchased us one of the smallest rooms in the resort. With most of the bigger rooms empty, he wondered how much an upgrade to a more spacious room would cost. After returning to the front desk, negotiating a little, and looking at a few rooms he upgraded us to one of the hotel's "casitas." The casitas are this hotel's most luxurious rooms. They're essentially small condos with a kitchenette, dining area and living room downstairs and bedrooms upstairs. Most families of four would be comfortable living in a home this size. How much did the upgrade cost? $30 per night. The addition of the kitchenette means that we'll self-cater more meals, and a single meal out usually costs us more than the $30 upgrade, so this is a savings on the overall cost of our trip.

The moral of the story? Don't be afraid to negotiate for a bigger room at the same rate or for a slight up-charge. You might be amazed at what you find...

1 comment | Posted on December 24, 2008 | Save to del.icio.us

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