Years ago, I was a set-it and forget-it person when it came to making hotel and airline reservations. I have realized that the set-it and forget-it mentality was costing me. I tend to book flights and hotels months in advance up to the opening of the airline or hotel booking windows. My wife and I are going to the Daytona 500 race weekend in February. In order to book a hotel near the racetrack, I made my reservation last April. Yesterday, I rechecked my hotel reservation and I am glad that I did.
Just like major holidays (Thanksgiving, Christmas), major events experience a large demand for hotel rooms. The Daytona 500 will have 150,000 race fans in attendance. The city of Daytona Beach, FL has a population of 68,866 (2018 census estimate). Assuming that 100,000 people will travel far enough to require hotel accommodations, the overnight population of Daytona Beach will more than double during this time period. It’s either book early or pay a huge price. Here are some factors that influence the cost and availability of hotel rooms:
- Seasons and weather
- Is school in or out of session
- Major events
- Hotel chain
- Hotel location
Large hotel chains have an accounting department that forecasts yield management. This is the ability to set a gross margin for a particular hotel room at a particular time at a particular hotel. Yield managers take into account various factors to maximize yield and is a dynamic process subject to change through time. I view yield management as a form of high-stakes gambling, will the forecast be accurate or is it off and need adjustment. This forecasting not only affects room price but also room availability if booking using points. Like that jug of milk in your refrigerator, hotel rooms are a perishable commodity. A room that goes vacant tonight is revenue that is permanently lost.
Yield managers continue to reevaluate room prices and raise and lower them as needed to realize a maximum margin and stay competitive. These are two competing dynamics in yield management.
Why I Review my Hotel Reservations Often
This is an activity that is at best case a “win” and at worst case a “breakeven” proposition. If the results of your review are worse than your current booking, just keep your current booking. If your results show something better than you can take advantage of that. This is what I’m looking for in reviewing my reservations:
- Is the same room now at a lower price?
- Can I get a better room for the same price?
- Can I stay at a better hotel?
- Can I stay at a better location?
I am looking at a situation to better my position as a result of updated yield management parameters.
Case Study: My 2020 Daytona 500 Hotel Stay
Shelly and I both have diamond status with the Hilton Honors program. I was looking for stay paid for solely by a Hilton Honors points redemption. The booking process started 10 months out on April 7, 2019 because I knew that thousands of other people would be looking for the same thing. Hilton Hotels now has 16 hotel chains in its portfolio of properties.
Certainly, I could find a hotel points stay in the same time zone as the event location. I was wrong. On that day, the Hilton search engine found the closest hotel for a points stay was 25 miles away at the Hilton Garden Inn in Palm Coast, FL.
I booked this hotel then and it gave me a place to start from. There were no Hilton Hotels available in the Daytona area for a “standard room” redemption. When you book with points at Hilton at the standard room redemption, you will get the fifth night for free and there is no daily resort fee. Here are the pros and cons of this hotel:
- Low point redemption rate.
- I may lose my “whirlpool” amenity.
- Five round trips of 50 miles each for a total of 250 miles of extra driving.
- The time in traffic to and from the racetrack (my time has a value to it).
- The walking and waiting to go to and from Parking lot 7 and taking the shuttle bus to the track entrance (again, my time has a value to it).
I needed to find something better.
Rechecking my Reservation
Yesterday, I went back to the Hilton search engine and it was now showing “point stay” hotels in Daytona Beach. It was like winning the lottery, I could now book a “point stay” at the Hilton Garden Inn across the street from the racetrack. Again, by rechecking availability, I was able to find a better hotel experience that I found last April.
There are pros and cons comparing the Daytona Beach hotel with the Palm Coast hotel
- The point redemption was double. Hilton Honors points are only worth about a penny a point so this wasn’t a deal-breaker.
- I lost my in-room “whirlpool” amenity but this wasn’t a deal-breaker either.
- I will drive at least 250 miles less.
- I can walk across the street to the racetrack. This is a major convenience and time savings.
The “GO – No GO” Decision
It’s decision time. Here is what I considered before deciding on rebooking to Daytona Beach:
- Is my new room the same, better or less? The answer is maybe. I am a Hilton Diamond member and I could get a room upgrade.
- Is the cost the same or better? Not in this case, the redemption amount is double. Hilton points are worth a penny per point, I’m OK with this.
- Is the hotel in a better location? YES, this was the decision jackpot factor.
- Is the new hotel chain the same or better than the current hotel chain? Both hotels are Hilton Garden Inn hotels so they are the same.
The Cost in Points Versus a Paid Stay
I’m a “what if” kind of guy. We know what the points redemption is for this stay. How does that compare with a paid stay?
The total cost of the “paid” stay with taxes comes to $2,559.38. What does the “Trivago Guy” have to say about this rate? I asked the “Trivago Guy” and Trivago took me to the same Hilton Hotels booking page. The result of that search showed that booking direct and booking using an online travel agency (OTA) was exactly the same.
Using the “set-it and forget-it” booking model can cost you in money, level of experience or both. Performing recurring reservation checks will take a little effort but can reward you significantly. The experience and value of this case study definitely outweighed the higher points redemption for this stay.