I know the feeling. When a trip looms usually it just seems simpler to make all required reservations in the same burst of activity, typically around two weeks out to get better airline fares. While I am at that, I’ll book a rental car (rarely nowadays in point of fact), make restaurant reservations, and of course book a hotel room. But that last move may be a sure money loser.
That’s news from Concur, the travel management company, which said its analysis of data showed that a majority of hotel rooms are booked in the 15 – 30+ day window (a staggering 20% are booked more than 30 days out) – and yet, according to Phocuswire reporting, “during the 8-14 day period, most hotels start discounting heavily ahead of the stay date. This can often be to the tune of a 20% fall in the starting price for a property.”
Read that again. It says that waiting to book a room until shortly before a trip can produce savings of perhaps 20% on the room rate.
Remember, at every hotel “revenue management” is the new Holy Grail but buttonhole most senior execs and off the record they will confide that their “competitors” suck at revenue management and that’s understandable because it’s a data science skill that requires serious analytical chops. Airlines were the first to master revenue management, usually called yield in that trade. But they threw sophisticated computers and reasonably smart data scientists at a multi million dollar problem. They got results. Meaning they maximize the amount of money they pull out of every seat.
Few hotels have that sophisticated tech gear, or the brainy data scientists, and therefore revenue management in hotels is, shall we say, more informal.
Ten days out and there are way too many rooms empty and what do hotel managers do? Panic. And slash prices, obviously.
And so they do, said Concurs.
Note: these Concur data pertain to Europe, Middle East, and Africa – but you can be sure the same facts hold in the United States.
Book a hotel room for $250 20 days out and you wasted $50 plus room tax on the $50.
Booking early also leaves you more vulnerable to paying cancellation fee penalties – now in force at Marriott (Starwood), Hilton, Intercontinental and more properties. To me, a traveler who came of age in the era of free same day cancellations (up until 4 p.m. at most hotels), the prospect of paying a night’s rate as a penalty for cancelling with less than 48 hours notice is horrifying. So I have advised staying aware of the reality that very, very few hotels ever sell out and, therefore, book as late as your stomach allows you (the day before travel is about right, although I have booked on the morning of travel). You’ll never pay an early cancellation fee.
This Concur rate data adds more fuel to the book a hotel room late position.
Particularly because you will save big money on the room rate.
Concur executive Chris Baker, in a blog post that is rich in data, showed especially dramatic savings for late bookers of high end hotels in Frankfurt and Paris.
Baker also noted that there are real differences in discounting from country to country. “All three countries” – UK, France, Germany – “then experience a significant drop [in rates] between 0–3 days. However, prices in Germany are only 13 percent below the median whereas the U.K. sees a larger drop to -26 percent. Germany certainly holds truer when it comes to price fluctuation, but travellers and travel managers would do well to book later there in comparison to France and the UK.”
If you wait too long to book a room won’t you wind up sleeping on a park bench? Nope. Definitely unlikely.
Very few hotels ever are fully booked except during truly special events – the Super Bowl or the NCAA Final Four and a few blockbuster conventions. Waiting until late to book is not that risky.
I am looking at 4:15 pm in Manhattan and tonight I see rooms at the five diamond Pierre ($338 on HotelTonight) and the Park Central near Central Park is $99. HotelTonight has many more Manhattan hotels to choose among.
In Washington DC – where there’s a large credit union convention this week (GAC) – the Watergate is $299 and a one bedroom suite is $349. The Kimpton Mason & Rook is $299. The Washington Plaza, on Hotels.com, is asking $222 and that Thomas Circle place is my personal fave. Again, a lot more hotels are in HotelTonight. You would not sleep in Dupont Circle tonight if you were now arriving without a hotel reservation tonight. There is vast availability.
Bottomline: Book late. Very late. Save money on the room while ducking those hideous cancellation fees. It’s win-win for you.