The Demand Solutions Blog

Channel Pricing Conflict and Customer Service

Posted by Donald Davidoff on June 17, 2013

So this past week was an interesting one for travel. I was attending the Folk Alliance International’s conference in Toronto through Sunday. Nothing to do with multi-family housing—just an organization I’m Treasurer of and a chance listen to a lot of incredible music while getting very little sleep.

I was supposed to fly home Sunday evening, change out clothes and fly the next morning to the NAA Student Housing conference to be on a student housing pricing panel (probably a good topic for a future blog), then on to Rainmaker’s LRO User conference in Palos Verdes, CA. Side note: Bruce and Tammy sure know how to pick resorts—the Terrenea is just a fabulous resort with view of the Pacific Ocean and Catalina that are just spectacular.

Unfortunately, the weather in Denver decided not to cooperate. With a foot of snow and high winds, the airport pretty much shut down and my flight was canceled. After much teeth gnashing and finally re-scheduling my flights to skip going home and get straight to Vegas (first time I’ve ever done a professional speaking engagement in t-shirt, jeans and sneakers; funny thing was—it being a student housing conference—I wasn’t even the most under-dressed person in the room), I had to figure out what to do for a hotel room that night. And since it was a weather delay, United wasn’t responsible and I had to pay—which is what brings us to why I’m blogging about this.

Classic dilemma here—I really just want a room for as cheap as possible since there’s almost no distinguishable value differences between my choices (assuming I limit to generally reputable brands). It’s hotel rooms as the ultimate commodity. But I’m also a bit desperate—tired, not looking forward to the 340a wake-up call coming in roughly 8 hours and thus really not interested in a whole of searching.

So I go to the hotel kiosk by baggage claim and call the Comfort Inn Airport North. The guy tells me that the rate would be $105. I normally don’t try negotiate with hotels even though I know it can be done (I just don’t want to be “that guy”), but heck—I’m tired, I really don’t want to spend more than I have to, and I’ve got a blog to write. So I ask the guy if there’s anything that can be done with the rate. He says no, and I play the sympathy card—“not even for a traveler stranded by a flight cancellation due to weather?” Interesting that we might expect someone to give us a break when it’s due to weather but we probably wouldn’t expect the hotel to budge “even for someone who just screwed up and forgot to book a hotel night.” Same economic value to the hotel—and it’s not like there’s a long-term client relationship here since I don’t know if I’ll ever be back in Toronto; and if I am, I’m not likely to stay in that area.

So it gets even more interesting. He responds that he can’t do anything. But, if I go to the Traveler’s Aid desk and book through them, they can get me a $72 rate. More work on my part, the Comfort Inn is probably paying a commission and thus getting even less than the $72, but there you go. So a) why is there this “hidden channel” that I only discovered by pleading for sympathy and b) why can’t he just give me the $72 rate over the phone and be done with it? We don’t tend to have these channel conflicts in multi-family housing, so I’m not sure there’s a lesson to learn in our industry, but there’s definitely something to explore as a matter of pricing strategy and customer service in general. I’m not saying they were wrong—but it did seem a bit odd.  What do you think?

Topics: Revenue Management