Phone? Web? Agent? For Best Hotel Rates, Try All

Once upon a time, hotels had so-called “rack rates,” the “official” room prices published in brochures. These were mostly inflated, but at least they gave guests a benchmark when bargaining for a room.

Forget that.

Rack rates have largely lost their meaning in the last few years as major chains switch to the computerized yield management system that airlines have long used to determine fares. When demand is projected to be high, prices automatically increase; when it’s low, they drop. Fewer and fewer directories of chain hotels even bother to list rack rates, says Robert Mandelbaum, director of research for PKF Consulting, a hotel industry research firm.

On the ground as in the air, prices can be as ephemeral as jet exhaust.

A colleague slipped into the pricing quicksand earlier this month while trying to get a room for one night at the Hilton La Jolla Torrey Pines. The reservations agent quoted her $234 for a view room, recorded her credit card number--then said with what seemed like genuine surprise that the rate was changing as she was booking it. Now the price was more than $300. But--good news--it could be brought down to $255 by using an American Express card. When my colleague checked the hotel’s Web site, it showed about $240.

Later in the day, I checked the Hilton Web site again, and it showed no rooms available. Five minutes later, I called the hotel and was quoted $225 for the view room--the last one in that category, I was told.

Peter Strebel, senior vice president of sales and marketing for the hotels division of the conglomerate Cendant Corp., thinks yield management helps consumers get better rates in low-demand periods, but he acknowledges some frustration with it. “Rooms were disappearing while I was on the phone” in April booking a family trip to Orlando, Fla., he says.

Two other techniques borrowed from the airlines are also appearing in the hotel industry: Internet-only prices and nonrefundable bookings. “Hotels are just grasping now to do anything to get more business,” PKF’s Mandelbaum says. His company’s research shows the average U.S. hotel suffered a 19.4% drop in profits in 2001--the largest in more than 60 years--and it projects an 11% decline this year.

In an effort to control price chaos and build brand loyalty, some hotel chains are offering “guaranteed rates” on their Web sites. If you can find a lower rate on another Web site, they’ll match or undercut it.

But you may be able to get a better deal by calling the hotel yourself, as I recently discovered.

Cendant’s “Guaranteed Best Available Rate” program made its debut June 17. It promises that Web sites of its brands--AmeriHost Inn, Days Inn, Howard Johnson, Knights Inn, Ramada, Super 8, Travelodge, Villager and Wingate Inn--”will have the lowest rate publicly available to consumers on the Internet.” If you find a lower rate, Cendant will beat it by 10% if you can document it. (Forms are on the chains’ Web sites.)

Cendant does not, however, promise that its Web sites will beat members-only deals such as those offered by AAA and AARP; rates offered to those who call for reservations; or rates booked on such sites as www.priceline.com or www.hotwire.com, which don’t disclose details until after the booking is made.

I spot-checked three Cendant hotels against the promise earlier this month, comparing the lowest rates for the same weekend in July. Besides the hotels’ Web sites, I used Internet hotel discounters www.hotels.com and www.quikbook.com, and I also called the hotels. Results were mixed.

For the Days Inn-Seattle Downtown, all sources offered the same rate: $109.85. (So far, so good.) For the Wingate Inn-Portland-Hillsboro in Oregon, the Cendant Web site offered $79, Hotels.com $69.95, and the hotel $89.10. (You lose, Cendant.) For the Ramada Inn & Suites-Gaslamp/Convention Center in San Diego, the hotel Web site offered $118.99, Hotels.com $129.95 and the hotel $89.99. (Cendant wins the Web site race, but I would have lost $29 for relying solely on the Web.)

Starwood Hotels & Resorts began a similar guarantee June 1. In spot checks, its Web site matched or beat the lowest rates I found elsewhere on the Internet for two of three hotels, the St. Regis in Washington, D.C., and the Sheraton Boston Hotel.

But I got better deals for those two hotels by phone. At the Sheraton Boston I was quoted $159 on the phone versus $189 on Quikbook.com and what appeared to be $179 on the Starwood site (where the $199 rate included a $20 food credit). At the St. Regis I was quoted $215 versus $218 on the Starwood site and $239 on Quikbook.com. In fact, I could have had the St. Regis room for just $155 under a 21-day AAA “advance purchase rate” that was nonrefundable, the reservations agent said.

One lesson I draw from these spot checks: No source has the corner on low hotel rates. The phone may trump the computer or vice versa. You need to check all sources or get a travel agent to check them for you. (Travel agents may have better prices, based on special deals with suppliers.)

But cheap rates can come with potentially costly conditions.

In checking out the “lowest Internet rate guarantee” of another corporation, Six Continents Hotels, I found a $148.85 price on its Web site for a room at the Holiday Inn San Francisco-Fisherman’s Wharf in July. That nosed out the $149.95 rate on Hotels.com and the $153.43 rate the hotel offered by phone.

But when I clicked to the hotel Web page to book the $148.85 rate, I saw this note: “Advance purchase reservations cannot be canceled, changed or refunded.” By contrast, I could cancel the $153.43 room up to 6 p.m. the day before arrival without penalty, the hotel’s reservations clerk said. Hotels.com would charge me a $10 penalty for changes up until 24 hours before arrival.

I would be willing to pay $4.58 more per night to avoid losing $148.85 in case I had to cancel.

Not all Internet hotel rates have such restrictions. Cendant’s Strebel says his company doesn’t offer any Internet-only or nonrefundable rates, but it is studying the issue. Some of the “Hot Deals” I checked on Starwood’s Web site (www.starwood.com) allow cancellations without penalty up to 6 p.m. the day before arrival, some only until 72 hours before. You need to click on “Rate Details” on each Starwood rate listing to find the cancellation policy.

One rule of thumb: The less research you do, the more you’re likely to pay. It’s enough to make anyone lose sleep.

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Jane Engle welcomes comments and suggestions but cannot respond individually to letters and calls. Write Travel Insider, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012, or e-mail [email protected].