When will hotels start their Motel 6-ization?

by David Burns on June 27, 2008

It’s only a matter of time, folks.

Airlines are reducing services and nickel-and-diming us for everything from checked luggage to Cokes. Are hotels next?

The cost of jet fuel is causing air carriers to raise ticket prices to the point that the average family can no longer afford that trip to Disney World, or if they can, they certainly can’t afford to stay at the Contemporary Resort.

Likewise for the business customer, the rising cost of prices on the hourly shuttles between Washington and Boston may stretch travel budgets to the point that staying at the newly-opened Renaissance Boston Waterfront Hotel is out of reach.

Ritz-Carlton Hotels have seven domestic and 15 additional international properties in the works. Maybe people who stay in Ritz-Carltons are immune to the crunch you and I are facing, but how many pseudo rich folks are left after all of those sub-prime pigeons have come home to roost?

W Hotels, a funky arm of the Starwood family of properties, have quite a few new hotels on the horizon. On a personal note, I stayed at the new property in Mid-town Atlanta shortly after it opened earlier this year, and to say there were a few kinks that needed working out is an understatement. It was so bad, my stay was free, so I guess I can’t get too worked up.

At some point, this bubble has to burst.

The sour economy will eventually, I fear, catch up with the hotel industry. I have visions of empty hotels scattered across once-desirable parts of major cities.

Or, the folks at Motel 6 might make out like bandits, removing the signature clock from the lobby of the new Waldorf-Astoria in Orlando and replacing it with vending machines that dispense that quintessential Southern favorite dinner-on-the-go, MoonPies and RC Cola.

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  • http://notravelmlms.blogspot.com/ John F

    Not gonna happen. When people travel, they are finding a temporary home. They have been hassled to get there if they have flown, taken Amtrak or Greyhound.

    The hotels are impacted byu the economy and oil but not as directly as the airlines so it is easier for them to hold the line on pricing.

    Yes the prices will rise, but I I bet the model remains the same!

  • Matthew B

    The bread and butter for four and five star hotels is not the lone business traveler or the rich person taking a vacation. It’s the conference trade. I work for a small international organization that organizes 50 person meetings on average once a week, with an average meeting length of three days. These take place in four to five star hotels around the globe. Translate that into a group like the G8 or UN and that’s where hotels make their money. Sure we may have to trim our budgets, but boards have to meet face-to-face sometimes, and it costs what it costs. If the hotels don’t provide the basic things required for a convention or conference, they cut themselves out of that extremely lucrative market.

  • Ron Goltsch

    While the airlines are selling transportation from point A to point B, where it easy to compare prices, hotels offer a lot more differentiation in their poroducts. When I fly to a city, not only am I looking for decent price on a hotel, I have a few other criteria:
    1. Distance from my customer
    2. How much crime is in the area
    3. Local restaurants
    4. Clean room
    5. Area to work in room (Good desk)
    6. Good Internet Service

    These aren’t in any particular order, but you notice I didn’t mention health club, restaurant in hotel, free breakfast, or free happy hour. The average traveler at a Courtyard Inn or Hampton Inn isn’t looking for those items.

    Sure, the higher end traveler might notice that the W’s and Ritz Carlton’s of the world have increased the cost for these items. But we have seen reports that these hotels have been doing this for years on Internet service, charging for connectivity when the mid to low price chains offer it free. They can get away with it, so they do.

    While I see the hotels raising prices, I don’t think we will see the mid and low range hotels raise the costs for small perks, as they have few to break out in the bill to charge for in the first place.

    As an aside, I actually prefer to pay a small fee for Intenet connectivity in my hotel. If there is a charge, that immediately seems to stop half the people from using the service, speeding it up for the rest of us.

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