No Vacancy

USA Today’s Hotel hotsheet has a post entitled “Sorry, you can’t check-in…”. That’s apparently what the paper’s Kitty Bean Yancey was told as she and her friend tried to check at the Delray Beach Marriott in Florida over the July Fourth holiday. Yancey states that ” it’s a situation I’ve never encountered before”. When she asked the desk clerk whether the guests can’t be made to leave, the answer he gave was “he had been trying, but it was against the law to evict them”.

While different jurisdictions offer varying degrees of coercive ability to innkeepers, most rarely, if ever, use it. The reasons are many and not the least of which is a scene in the lobby in the presence of other guests seeking to check-in or out. However, on full occupancy days, the chances are most hotels are full not because the previous guest failed to check out per their intent at registration but more likely because of hotels’ tendency to oversell. With most hotels having a 3 hour margin between the check-in and out process, they have considerable ability to “enforce” a check-out. What they don’t and often cannot predict with any certainty is that all guests – including those who have “guaranteed” their stay – will arrive between 3pm and the next morning.

With no-show revenues amounting to a material sum and a substantial number of guests failing to show up for any number of reasons ranging from missed flights to sheer laziness on their part, it is incumbent on hotels to “maximize” their inventory. Just as the airlines have always done since the time of People’s Express in the 80s, hotels use yield management to predict customers’ ability to pay and their travel pattern. In a supply constrained situation – as in present day Manhattan – yield management pays rich dividends to operators. The unfortunate – and somewhat short sighted consequence – is that it fails to differentiate based on service as probably was the case with the Del Ray beach Marriott. It is unlikely that Marriott Rewards customers are any less prone to being denied a room than someone not on their loyalty program. Hotels need to, at a minimum, make greater strides towards accommodating their past in the future if they are to avoid a reprise of the airline industry’s woes.

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Vijay Dandapani

Co-founder and president of a New York based hotel company for 24 years. Grew the firm to five hotels in Manhattan and also developed a greenfield project at MacArthur airport, New York. Speaker at numerous prestigious forums including Economy Hotels World Asia, Lodging Conference, NYU, Columbia University Real Estate Roundtable, Baruch College's Zicklin School and ALIS. President and ceo of New York City Hotel Association since January 2017.

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