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GOOD NEWS FOR 2009: LOWER HOTEL RATES
By Michael Matthews
January 15, 2009 -- We are about to have a new President and a new Super Bowl Champion. That's good news--I'm an Arizona Cardinals fan--but there's more. We have all seen our 401Ks crash, our houses reduced in value and a guy scamming the rich for $50 billion. That's bad news--Does Bernie Madoff have any friends?--but there's still more.

There is a bright spot on the business-travel horizon. And it's on the hotel front. Not for investors or management companies, but for those of us who put our heads in strange beds on the road.

Hotel and resort rates are crashing in line with the rest of the economy. Wherever you're going you'll find that you can buy your hotel bed for 30 percent or even 50 percent less than you paid a year ago. It takes a little research, but the deals are out there.

Some examples of what I've found lately. A year ago, the Four Seasons in New York boasted an average daily rate--that's the gross rooms revenue on any given night divided by the number of rooms occupied--of nearly $1,000 a night. I called the hotel's reservations office this week and was offered a room for $450 a night. That's a 50 percent saving in one year. Not bad at all, especially considering that I didn't even call my friend, the general manager. On a lower price scale, my wife, who once a month visits her ailing mother in Fort Worth, Texas, stays at a La Quinta Inn. She normally pays $109 to $125 a night. She just got the same hotel next week for $69 a night. On the West Coast, room rates in Los Angeles and San Francisco are down by 40 to 50 percent compared to last year.

In past columns, I have said that the best way to get the best deal is to book your accommodations directly with the hotel's executive office, preferably directly with the general manager. Call and say that you will be visiting on a regular basis and your company is on a tight travel budget. And be sure to say how much you'd like to meet him (or her) when you visit. I guarantee that you'll be welcomed, maybe get an upgrade, probably a fruit basket and possibly a new friend. You'll certainly get a better rate. Try it, it works. It did for my wife, who wangled her $69 a night rate in Fort Worth by calling direct to the hotel's management.

Internationally, the same conditions and time-tested bargain tactics apply. Be it Europe or Asia, big city or gateway town, hotels are suffering. A friend just reserved the Lanesborough, a terrific hotel that traditionally commands the highest nightly room rate in London. What did she get? A junior suite for £350 a night. That's about $525--still a very high rate for most of us, but 60 percent off their published tariff. She got the big deal by calling the general manager and asking. Even in Hong Kong, where the economy hasn't been hurt quite so badly, bargains abound. The former Crown Colony is getting over-hoteled, so prices that you'd normally pay for a 3- or 4-star hotel will now get you into the very top rung of hotels. But you must call the general manger to get the best deal. It's one of the best uses of Skype that I can think of!

How do you get the name of the general manager? Simple: Call the hotel's main switchboard and ask for the name. Once you get it, ask to be connected. But be sure you check the time: You won't get a deal if you wake him up at two in the morning local time!

The mathematics of all this discounting, not to mention hotel-keeping in general, is easy to understand. For every $100,000 it costs to build or to purchase a hotel, the property needs to generate $100 a night per occupied room at 65 percent occupancy to cover the debt and make a reasonable return on equity. If occupancy falls below 65 percent--and the nationwide occupancy rate is now around 61 percent--then every extra dollar a hotel can pull in is "found" money. Each extra dollar of revenue makes the difference between breaking even and losing money.

The person who can make the decision to give you a cheaper room is the general manager. She or he is responsible for turning the bottom line black. She or he doesn't want you going down the road to the competition, so there is tremendous pressure to make a deal and fill the rooms. And never forget: In this economy, you are found money for hard-pressed general managers looking to stem the red ink.

Now that you've paid attention and I've saved you and your company money, as well as helping you get a better night's sleep, I have a small request: Send 10 percent of your savings directly to my Swiss Bank account. It's a much better deal than Bernie Madoff gave his investors--even if it won't make me rich or send me to jail.
ABOUT MICHAEL MATTHEWS Michael Matthews has managed and marketed fine hotels around the world for more than 45 years. He spent 14 years in Hong Kong building the legendary Regent International group. He has also worked with St. Regis, Ritz-Carlton and Rosewood hotels. Matthews is currently based in Arizona. He began writing Do Not Disturb in early 2004.

THE FINE PRINT Joe Brancatelli makes this space available to Michael Matthews in the spirit of free speech and to encourage editorial diversity and the wider discussion of important travel issues. All of the opinions and material in this column are the sole property of Matthews. This column may not be reproduced in any form without the express permission of Michael Matthews.

This column is Copyright 2009 by Michael Matthews. JoeSentMe.com is Copyright 2009 by Joe Brancatelli. All rights reserved.