The Brancatelli File
SHOULD WE JUMP
ON THE RACK?
BY JOE BRANCATELLI
November 4, 1997 -- Don't think I don't understand. I know my ugly mug pops up right next to these words. I understand that you're staring at the screen with your mouse in one hand and a Milk Dud in the other. I see you waiting to pelt me if I say something stupid.
But, please, before you splatter your snack upside my face, hear me out.
It's possible, just possible, that you may want to pay a few bucks more for your hotel room.
Let me explain. We all know hotel rates are rising. Fast. According to Smith Travel Research, the hotel statisticians, the average daily room rate has jumped about 20 percent since 1991 and may increase another 5 percent this year. The Zagat Survey of 32 major cities pegs the room-rate increase at 24 percent since 1995. And Coopers & Lybrand, the accounting firm, has clocked some year-over-year increases at 13 to 14 percent in several large business-travel markets.
Rates are rising so fast that we're getting perilously close to paying the "rack rate." You know what the rack rate is, don't you? That's the rate the hotel publishes on its tariff sheet. The sheet that goes into the brochures that hotels put in their lobby racks. The rate that, until recently, no business traveler ever paid unless there was a blizzard and you desperately needed the last clean room in town.
So now here's my point: Since we're so damned close to paying the rack rate anyway, we might as well go over the top and pay the full rate. Why? Because several hotels have larded their rack rates with so many extra amenities that those rates are actually a better deal then the slightly discounted prices we're paying now.
Consider, for example, the rack rate at Shangri-La (800-942-5050), the fine group of Asian hotels. They've renamed it the "value-added rate" and, if you pay it, you get all these goodies: free roundtrip airport limousine service; free American breakfast; free dry cleaning and laundry service; free local calls; fax and long-distance calls at cost; and a 6 p.m. check-out time.
"We wanted to reward customers who pay full rate and we didn't want it to be something trivial like an extra banana in the fruit basket," cracks Robert Hutchinson, the chain's senior vice president of marketing. "Our perks are the kind of stuff that travelers understand. They know how much they'd pay for what we're throwing in free."
No kidding. In Hong Kong, where Shangri-La operates two properties, a hotel's airport limo runs about $80 roundtrip, a hotel breakfast costs about $25 and hotel telephone and valet rates are padded to stratospheric levels.
No other chain offers quite the deal Shangri-La does on its rack rates, but there are plenty of other novel promotions:
+ The Business Options rate at Inter-Continental (800-327-0200) hotels offers travelers a choice of freebies: an upgrade to a club room or a junior suite; a full breakfast; or double frequent-flyer miles.
+ The Business Plus rate at Thistle (800-847-4358) hotels in Britain includes a room upgrade; early check-in and late check-out; free faxes; and free breakfast.
+ The 9 to 5 Program at ITT Sheraton (800-325-3535) hotels allows guests paying regular rates to check in as early as 9 a.m. and check out as late as 5 p.m.
Individual hotels are also getting into the full-rate action. Two examples: Guests at New York's exceptional Mark Hotel (800-THE-MARK) receive an in-room fax machine and a cellular telephone. And at London's Britannia Hotel (800-465-6486), the Corporate Rewards plan allows guests to choose a daily dining credit of £15 pounds, airport transfers or an hour's use of a conference room.
"Companies are recognizing that people spend a lot of time in their hotel rooms and they need to be more productive, so they're willing to pay a little more," explains Chris Vukelich, vice president of sales at Swissôtel (800-637-9477). His chain's Swiss Business Advantage rooms are equipped with fax machines, sophisticated telephone systems and other free amenities.
"Booking a hotel room is not always about cheap anymore," he adds.
Now that sounds like a new business-travel paradigm to me. For the moment, it might be wise to give up the never-ending quest for a great hotel room at a rock-bottom price. Bargain up instead. See what the hotel will fork over if you pay a few bucks more.
If I haven't convinced you, pelt away with those Milk Duds. But watch out for my glasses. They cost more than a night in a good hotel at the rack rate.
This column originally appeared at TheTrip.com.
Copyright © 1993-2005 by Joe Brancatelli. All rights reserved.