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?
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…
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
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.
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Photograph ©2017 by Brian Cohen.