HotelChatter

Tips

Super 8 Won't Comp Your Room But the Ritz Carlton Just Might

July 25, 2006 at 10:30 AM | 0 Comments

Travel writers, travel agents, meeting planners, and other influencers are losing out to the bean counters (and so are the buddies of hotel employees).

According to this industry report from PKF Hospitality Research, the number of complimentary rooms being divvied out by hotels is low and getting lower. "In 2004, comp rooms represented 1.63 percent of total occupied rooms. This ratio dropped to 1.57 percent in 2005." (Indeed, the title of the article is "Comp Rooms: More Difficult than a Free Lunch.")

Chalk it up to "yield management," a fancy term for the concept "squeeze the highest possible price out of every room at all times." Picture accountants slumped over spreadsheets, bar graphs, and real-time reservation summaries and you've got a pretty good picture of how it works.

There's a lot of accountant-speak in the linked article, but the interesting part is the section on what kinds of hotels comp the most rooms and what happens as a result. "Consistent with the examination of complimentary rooms by property type, our analysis finds a strong correlation between the average daily room rate of a hotel and their propensity to offer comp rooms," the report says. "Hotels in the luxury (1.63%) and upscale (1.89%) market segments extend a greater percentage of complimentary rooms than those in the economy (1.39%) and budget (1.15%) categories."

Well duh. Give stuff away and lots of people write about you and talk about you. Which sells more rooms. Which supports your higher rates. Hard to put that on a spreadsheet, but any mid-20s PR flack can probably explain it to the money guys. If you're running a luxe property with a high nightly price tag, especially a resort or convention hotel, be prepared to pony up some free rooms. If you're just running the Super 8 motel by the Greyhound station, however, forget the comps and keep an eye on what the night clerk is doing with those extra keys.

Related Stories:
· Comp Rooms: More Difficult Than A Free Lunch [Hotel News Resource]