Hotels Turning Into Ghost Towns, But Don’t Expect Cheaper Rooms


Hotels are experiencing fast declines in occupancy according to Time. In order to get people in the rooms, hotels are rolling out a bunch of gimmicks from kinky adults-only weekend getaways in Bermuda (?) complete with sex therapists to upgraded perks like free gym access and wi-fi. Why are vacancies on the uptick? The bad economy, of course, but theres also been a surge in construction:

Part of the industry’s current problem is an oversupply of rooms. Sheraton, for example, is opening up 54 hotels this year, at a rate of one every three weeks, financed in the days when the economy was roaring and money was cheap. As the room glut deepens, hotel builders are slamming on the brakes — there is a 75% increase in projects being stopped. But demand is falling quickly too. “There’s [been] nothing like this in history, in terms of falling demand” says Bjorn Hanson an industry analyst with New York University’s hotel school. With the strengthening dollar, hotels are losing the European traveller; slumping corporate profits mean conventions are seeing fewer attendees; and as the job picture worsens, family vacation travel is down.

So we can expect heavy duty discounts right? Not so fast.

One option most are rejecting is reducing the overall room rates, because hotels feel they got burned doing that in 2001. “They found that the maths doesn’t work,” says Yesawich; “you have to book too many more rooms to make up the lost revenue.” What they are doing this time around is offering promotions and upgrades: Fairmont is offering third night free and $100 gift cards.

So, if you want a discount, you’ve got to be a bit sneaky about it.

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