Value Remains King in 2010

Swimming at The Breakers

One of the few positive consequences of the travel downturn over the past year is that it has forced hotels at every quality level to become more value conscious.

Hoteliers who have been able to figure out how to manage costs while maintaining value for their guests have been able to ride out the storm while keeping occupancy rates higher than the industry average. I’ve seen this trend in action repeatedly through both our booking activity on Ciao Bambino and my own travel experiences.

We stayed at The Breakers in Palm Beach (FL) last month and experienced true luxury at every level. Although The Breakers attracts plenty of the ‘money is no object crowd’, management is still focused on ensuring every guest feels special through continuing their high staff-to-guest ratio (while other luxury hotels are noticeably short-staffed) and a rewards program that gives guests ‘credit’ to spend on the long list of onsite amenities.

Although nightly rates have been dramatically reduced everywhere over the past year, hotels are maintaining high price points during peak periods, weekends, and holidays. In some cases I’m wondering if hoteliers are even charging higher-than-usual rates over times when they know they can fill rooms. The unfortunate consequence of doing this, however, is that in many cases, properties have cut staff, so guests are left paying high rates, but end up with a disappointing travel experience. While understandable, this is not a good strategy for customer satisfaction and loyalty.

We recently stayed at the Inn at Sugar Bowl in the Lake Tahoe area (CA) for the weekend. Our family connector (queen room connected to one with twin beds) was just under $350 per night. While this is not a luxury hotel price point — particularly for a weekend in January — when I spend $700 on lodging, I’m expecting a good-if-not-great experience.

At the end of the stay I’d rate our experience as adequate. The hotel was painfully understaffed at every turn, but the inviting, family-oriented ambiance and ski-out location outweighed the downsides. Interestingly, guest loyalty at Sugar Bowl is strong, but I suspect they lose clients unnecessarily through high pricing paired with average rooms and service snafus. Note, the Inn at Sugar Bowl remains a great option for families and our family friendly ski resorts portfolio based on the exceptional convenience and kid-oriented amenities.

I always explain to our hotel partners that ask me for pricing feedback that the equation is simple:

The more you charge, the more people will expect, and the harder they will be to please. This is a distinct and always predictable trade-off.

I just looked up room pricing at Cheeca Lodge in the Florida Keys for the upcoming President’s Day Holiday. Their website returned a discounted rate of $674 per night (rack is $749) for an Island View (non-oceanfront) King. I just stayed at there last month and although the oceanfront setting is lovely and the newly renovated main lodge has some top notch features, when families (or anyone) pay $700+ per night for a room, they will expect a complete luxury hotel experience with reliable, exceptional service.

The issue is that Cheeca Lodge just reopened after a fire and subsequent renovation — there are re-opening service pains in progress and those paying top dollar to stay there may end up disappointed. Also, room quality varies greatly. Cheeca’s recent Trip Advisor reviews reflect these inconsistencies. As with Sugar Bowl, despite an imperfect experience at Cheeca, I still recommended it as one of the best Florida family hotels; hopefully, management will work hard to create better service consistency for guests.

Why not just keep rates at a level where mistakes are forgiven and every guest feels like they’ve received value for the money? Kids or no kids, travelers continue to demand value and hoteliers need to price rooms and services accordingly, as well as figure out how to provide a strong guest experience with ongoing budget constraints.

I received complimentary lodging at The Breakers, but this had no impact whatsoever on my opinion outlined above that quality at this hotel is exceptional at every level.

Relevant Links:

The extraordinary details of a top luxury hotel

Finding family friendly boutique hotels

Finding the best family hotels in Europe

Things to consider before booking a large resort

Evaluating family all inclusive beach resorts

Getting last minute hotel room discounts

Finding toddler friendly hotels

One Comment

  1. Great post. This is something that is so challenging for hotels is that of providing value at a time when so many hotels are having to decrease value. I agree that if I’m paying above a certain threshold that I’m expecting greatness. I’m paying luxury prices for a luxury experience that I won’t just get at your interstate budget hotel.

Leave a Reply

Your email address will not be published. Required fields are marked *