Travelers turn to Web for bargain hotel rates
By Chris Woodyard
USA Today
Eric Thompson happily admits the rate he paid for a room at a full-service hotel isn't what he'd spend at a Motel 6.
It's a lot less.
Thompson says he has paid $28 to stay at a Doubletree in Portland, Ore. By comparison, a nearby Motel 6 would cost about $45.
"It thrills me in all sorts of bizarre ways," says Thompson, CEO of a small scientific equipment maker, who racks up hotel savings nearly every time he books.
"We save so much money, it's criminal," he says.
Actually, it's perfectly legal. Thompson is one of the stealthy few business travelers who book rooms through vacation-oriented Web sites such as Priceline or Hotwire.
For the uninitiated, Priceline and Hotwire are two of the best-known Web sites that don't tell you what you're buying until you pay for it.
For hotels, you can pick a night, an area of a city and a quality rating for a hotel, generally one to five stars.
Hotwire has fixed prices. Priceline requires that the customer bid, or as the company likes to say, "name your own price," for the stay.
The savings can be enormous — especially because business travelers are accustomed to shelling out top dollar for hotels. Priceline boasts that its customers save up to 40 percent on hotel rooms, its fastest-growing segment.
John Paasonen, who advises philanthropists, says he routinely pays $45 to stay at a Hilton on Michigan Avenue in Chicago or $35 for a Sheraton Suites in the suburb of Arlington Heights by booking on Priceline.
When he hears of a $400 hotel room, he asks himself, "Who would pay for that?"
USA Today has tried Hotwire for business trips, as well. A reporter paid $66 a night for the Holiday Inn Seattle Center in Seattle and $44 for the Hilton in downtown Milwaukee this spring. Both were for Sunday-through-Wednesday stays.
An unprecedented three-year drop in demand has driven hotel owners to fill rooms through discounters such as Priceline and Hotwire, says Bjorn Hanson, hotel expert for PricewaterhouseCoopers.
Changes in corporate travel policies have made it easier for business travelers to book them.
"Now, it has almost become a status symbol to use Hotwire and Priceline," he says.
Hotels have become more desperate, even if it means accepting low rates. While occupancy is finally leveling off this year after two years of declines, rates continue to fall — another 0.3 percent this year, Hanson says. Full-service downtown hotels are one of the hardest-hit segments. Rates for that category are expected to fall 1.8 percent this year from 2002.
Generally, though, it's usually only tightwads at the smallest of companies that resort to Priceline and Hotwire for business travel.
Hotwire, for instance, estimates that no more than 8 percent of its hotel bookings are made by business travelers. Priceline doesn't even take a guess.
"Hotwire was not designed for business travelers," says Hotwire spokeswoman Amy Bohutinsky.
Priceline is even more blunt.
"We do not in any way cater to or market to business travelers," says spokesman Brian Ek.
The discounters fear that hotel companies would be reluctant to offer deeply discounted rooms if droves of business customers were snapping them up. The hotels want to sell more expensive rooms to those customers, who are generally less resistant to paying higher prices.
To make their rooms less desirable to business travelers, Priceline and Hotwire make all sales nonrefundable. That restriction penalizes business travelers, notorious for making last-minute itinerary changes or canceling trips altogether. And many don't have the nerve to buy a stay without knowing the name of the hotel in advance, with no refunds allowed if they don't like it.
