Consumers want deals – even when that deal doesn’t necessarily translate to direct savings. Savvy marketers know this very well, and it’s the reason that One Day Sales are so successful. Of course prices are raised the night before to accommodate the sale. It’s quite rate a retail establishment would really take a loss on selling perfectly new merchandise.
In the hotel industry there are lot of ways to enhance the buying experience for end users looking for a deal. For one, packaging in added values into the room rate. When a rate includes the cost of parking, or breakfast, or internet – the idea that the traveler won’t then again have to reach into his pocket to pay for something one he’s on site, is brilliant. The hotel can collect a higher room rate, in most cases, and the traveler equates the conveniences to getting a deal. Hotels are also now offering substantial discounts for guests willing to prepay their stay. The savings can be rather notable, but the guest won’t be able to make any changes or cancellations to the reservation. In many ways, this is what the consumers are already accustomed to doing with their airfare – it’s only natural it’s now done with hotels.
On the group side, hotels can accomplish the same things. Rebates to the master account, overnight room rates subsidizing meeting costs, meeting room rental covering coffee service, these are all conveniences which don’t necessarily effect the hotel’s profit margin, but are deals in the eyes of the consumer because it changes the way they pay. In some cases, there really is added value for the customer, and that’s critical. But in most cases, the customer is willing to pay just about the same as they ordinarily would for the extra conveniences the hotel has packaged.