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Are Some Room Rates Not Being Reduced Because of Discrimination?

With occupancy rates drastically diminished to single digit percentages due to the 2019 Novel Coronavirus pandemic, one would think that the hotel and resort properties which remain open would significantly reduce room rates accordingly to attract more customers — but not all hotel and resort properties have done so.

Are Some Room Rates Not Being Reduced Because of Discrimination?

“So I still have to travel but 1 thing I have noticed is that a lot of hotels that are open are still charging a decent amount for a room. I mean they have 2% occupancy but their rates don’t seem to reflect that. Not all but some. So I have noticed a general theme by the managers when I call and ask why their rates are so high when nobody is traveling. Or not many are traveling” is what FlyerTalk member mikebor posted in this discussion. “The theme seems to be that they don’t want to make the rate too low to attract a different type of clientele to stay there. When I press them on what that means they pretty much tell me to read between the lines in so many words.”

Does this kind of response seem to evoke prejudice, bias, or discrimination in any way, shape or form in this day and age? “Like who don’t they want staying there, people that can afford a $59 dollar rate but not $159? And I’ve gotten this same type of answer from multiple managers at multiple hotels I have called”, continued mikebor. “Again to me it reeks of hidden discrimination. They don’t want low income people (and a lot of other adjectives) staying there as it would bring down the reputation of the property. So these hotels would rather have a 2% occupancy at a $159 rate than a 10-15% occupancy at a $69 rate because of the different kind of people who would stay there smh. Unbelievable this goes on in 2020.”

Would the overall clientele of a hotel or resort property actually be different enough if room rates are decreased significantly?

Other Possibilities…?!?

Upon reading that discussion for the first time, my initial guess is that the operators of hotel and resort properties did not want to attract an element which would be conducive to running a brothel — that is, with room rates which are cheap enough to have “quickie” sessions occur in the rooms of an otherwise respectable establishment…

…but then, a visitor fee would likely remedy that, as some hotel and resort properties charge one.

I then thought that perhaps the proprietors of those hotel and resort properties did not want anyone who lived within the same surrounding area to be able to stay overnight at low room rates. For example, a hotel property denied a married couple — whose home in Illinois in which they lived for 15 years was being renovated — to stay there for the night solely because of where they lived.

After attempting to check into a hotel property located nearby in Bradley for the night by handing over their credit card and official government identification to the person behind the front desk, Anthony and Jeanette Davis of Kankakee were first shocked and then livid at being refused to stay at the hotel property in October of 2019 — all because of a policy which restricts checking in guests who live in the local area and was reportedly implemented by the owner of the hotel property.

Many other possible reasons were offered by other members of FlyerTalk in the aforementioned discussion — including:

Trying to avoid “mattress runners”
Anyone who books a reservation now needs one, so why lower the room rate in the first place
Lower room rates might tempt sick people to book reservations for rooms to isolate themselves for extended periods of time
Not wanting to create demand by “purchasing” it — rather, keep the revenue per available room up and avoiding reducing the average daily rate
Hotel and resort properties may not be permitted to temporarily close altogether within certain jurisdictions; but they still need to preserve their profit margins and brand integrity

Summary

I tend to agree with FlyerTalk member allset2travel, who posted that “Pricing, high or low (subjective) technically is a form of differentiation, some choose to use this word ‘discrimination’.” Rather, the practice would be discrimination if the proprietors of the hotel and resort properties decided that people of a different race or religion were not allowed to stay at them solely because they do not like them.

One example I like to use to illustrate differentiation is if you would purchase a Rolls Royce or a Lamborghini for $100.00 without question. Usually, people would hesitate or balk at the deal, wondering if there was something wrong with the car — or if it was stolen — to explain the unbelievably low sticker price of the vehicle. They would usually rather pay a higher — and more believable — price. Too low of a room rate for a suite at an upscale hotel property would typically yield a similar reaction.

Of course, what was described in this article is not completely pervasive throughout the lodging industry, as you can find hotel and resort properties which have lowered room rates as a result of decreased demand — and you might see more of this phenomenon to attempt to improve demand as the pandemic wanes, which is predicted to occur within three months.

This article is the latest in a series pertaining to the 2019 Novel Coronavirus — which is also known as COVID-19 or 2019-nCoV or SARS-CoV-2 — pandemic in an effort to get the facts out with information derived from reliable sources…

…as well as attempt to maintain a reasoned and sensible ongoing discussion towards how to resolve this pandemic.

Other articles at The Gate which pertain to the 2019 Novel Coronavirus include:

March 30, 2020

Category Hotels and Lodging

8 thoughts on “Are Some Room Rates Not Being Reduced Because of Discrimination?”

NB_ga says:

March 30, 2020 at 10:20 pm

Honestly, income discrimination would my last thought.

My first instinct would be not wanting to tax the skeleton staffs they likely have on hand. And my personal best guess would be not wanting to risk an unnecessary influx of ill visitors who would inadvertently cause an outbreak at the property and then sully the brand reputation as the place where the virus ran wild.

Curious if an industry insider could chime in here.

Reply
1. Brian Cohen says:
  
  March 30, 2020 at 10:26 pm
  
  All are absolutely legitimate thoughts, NB_ga.
  
  I would never have thought of discrimination as a reason for keeping room rates high, as that really does not make much sense.
  
  Reply
June says:

March 30, 2020 at 11:13 pm

I work at a four star hotel and the reason we (and I presume many other hotels) don’t want to lower their rates is because low rates attract a different type of guest. It’s not discrimination or to save their reputation but quite frankly, more often than not, inexpensive rates attract guests who damage the hotel rooms and property. These guests have shown to occupy the room with more guests than allowed (5+ people per room), stain the linens, carpet and furniture with God knows what, smoke cigarettes and weed in the room, leave cigarette burns on the furniture, make noise disturbances for other guests, require the police to visit the hotel, and the list goes on. This occurs when we have ran on Groupon, Priceline, Hotel Tonight, etc. The extra revenue Is not worth the headache. As a result of learning the hard way, we no longer participate on these platforms and keep our rates at a certain threshold to minimize risks.

With the added concern of Corona virus infected persons wanting to isolate at the hotel, the hotel does not want the liability of having to care for the guest nor put their employees and other guests at risk. We received directive from corporate that under no circumstances are we to allow guests to quarantine themselves at our hotel. For the record, our hotel elected to close this week.

Reply
1. Brian Cohen says:
  
  March 30, 2020 at 11:16 pm
  
  Thank you so much for a logical clarification from someone who works in the lodging industry, June.
  
  Reply
2. NB_ga says:
  
  March 30, 2020 at 11:17 pm
  
  Thanks for the first-hand knowledge, June! Much appreciated.
  
  Reply
Jackson Aimson says:

March 30, 2020 at 11:35 pm

Why would you even post something like this. How would you feel if you built a nice home or nice hotel and lowered the cost of rental or nightly rate so people who had nothing to lose and had no consequences that could deter them and came from groups that commit a disproportionately high amount of violence would ruin your nice home or hotel. Home owners and hotel operators have a responsibility not to let their properties turn into a disaster. Keeping prices high keeps the riff raff out. It is unfortunate hotel chains are deterred from discriminating on the basis of race because one or two groups commits 90% of the violent crime and property damage (whether it is in Paris, Rio, Chicago or the Bahamas) but because they will get sued they are forced to keep their prices high and for good reason.

Reply
Mike says:

March 30, 2020 at 11:49 pm

I think it’s acceptable for the reasons June listed above. I also look at it as of if I was renting my home. I set rent to fit a group of people I believe are most likely to care for my home. When it goes empty I don’t lower the rent to rock bottom prices as I know the type of people it would attract and on the back end I would have to deal with damages and or complaints from neighbors etc. If you look at the general condition of low budget Motels they are normally nasty drug and roaches all over, room smell etc.. Why would a hotel want to lower the rates for it to be trashed by a lower class of people? I for sure would not do it with a home that I own. I don’t consider that discrimination its just keeping a standard.

Reply
DaninMCI says:

March 31, 2020 at 7:05 am

I’m not sure I’ve seen it mentioned but I also wonder if the reward or points night reimbursement rates may be part of the reason. My guess is there are many reasons for not lowering the price. About a week ago my wife and I thought we would look at going to the beach in a more rural area of Florida that wouldn’t have a ton of people there. This was just before most areas announced shelter in place rules and people started to complain about beaches being the epicenter of disease spread.

What we found was that none of the beach hotels that we checked from various brands had lowered the price even a bit. Hotels that might have a normal $150 a night rate in normal times had $180 to $200 Spring break rates still in place. The points redemptions not any different. So we skipped it. I wasn’t expecting $50 rates but would have gone at say $95 rates. So maybe it wasn’t great timing for a vacation trip but we still would have gone and given them some business.

Reply

Are Some Room Rates Not Being Reduced Because of Discrimination?