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Thread: Choice Hotels

  1. #21
    MickeyCrimm made a bunch of great posts in this thread about working the system to maximum benefit, and I should imagine the same is true (to varying degrees) at most, if not all, major hotel chains.

    One thing that one of the franchisors did once---and this sucked---is that they made it possible to straight up purchase points from the franchisor's own website. This was also the case at the chain of hotel I managed, at one point in time. Looking at the site, it appears that they still offer this, but I can't see the specific point costs without logging in, which I'm not inclined to do.

    The main thing that sucks for hotels is that this is just another way to circumvent the hotels garnering a decent rate on the room and just allows the franchisor to make more money for themselves. The value side of the equation definitely favors the franchisor over the hotels, especially when you consider that the franchisees are already paying the franchisor a percentage of all of the room rates anyway, and even more if the guest books through the online channel...which they have to do to qualify for the majority of the promotions. I think that the highest card level can book hotel direct and qualify for anything, at least they could, but that might not still be true.

    The franchisors will sometimes offer a credit card, which is even more wonderful news for the hotels. There are a few reasons:

    1. Getting the credit card will often have a certain amount of points associated with opening the account. There are also points incentives to make purchases with the credit card outside of the hotels. As most of you probably know, credit cards do not make money ONLY on the interest that they charge their customers, (otherwise, why would they offer points or cashback?) but also on the percentage of the transaction that they charge to merchants. Though it's not as common now, that's why many smaller businesses often did not accept Discover and/or American Express: (but would accept VISA or MasterCard) and that's because Discover/Amex has/had higher merchant fees...by a lot.

    So, it's basically just a way for the franchisor to make more money as well as whatever bank the credit card goes through. In the case of points on hotel cards, this usually ends up materializing in the franchisor getting all the benefits while the franchisee has to eat providing the guests with all of those free nights. The free nights reimbursement for this chain (unless sold out) was sometimes not even breakeven cost, unless you were sold out or could make it appear as if you were sold out, then you got 90% of your ADR for the night.

    2. I don't know if it has to be with the franchisor's own credit card, but the guests being able to buy points is a pain for the hotels. They sometimes will do discounted offers to buy the points or have bonuses for their own cardholders on buying points.

    Depending on what is going on and how savvy the guests are, this can also be a pain in the ass for the hotels because it results in even more free nights. On rare occasions, (particularly special events) the guests could buy the full amount of the points needed for the night and after factoring in all of the bonuses, and what have you, they pay less for the room than even the room rate would have been.

    Usually what would happen is a guest would be a small amount of points short of having a free night anyway, so they would buy points such that they had just enough for the free night. While still not ideal for the hotels, this is at least reasonable and I think the originally intended purpose of being able to buy the points.

    More on Points Stays

    The biggest problem with the points people, though I do not think this is something that MickeyCrimm would do, is that many of them are completely underhanded. Remember, Points cost the franchisor essentially nothing, so it's the individual hotels eating most of the expenses associated with this and hoping the franchisor just pays them enough (based on their arbitrary, "Demand seasons") in compensation just to break even on the rooms.

    Anyway, many of the points guests knew that the franchisor would reimburse the points, almost without question, and all they had to do was complain about something. The worst part is that these complaints almost always (more on that later) stuck because the big points people are where the FRANCHISOR makes the most money, even though the individual hotels make very little on them and often lose money, all told.

    At the time, the cost to the franchise for a guest being refunded points was at a rate of $10/1,000 points. Think about this for a second: If you have a guest book a stay that requires 8,000 points, but then they turn around (after checking out with no complaints, naturally) and the franchisor offers them a full points refund...that means that the hotel just got billed $80 from the franchisor. In some cases, that would be more money than we would have even charged for the room had the guest been paying directly.

    ---So, you would THINK that it would be at least more fair for the franchisor to refuse to reimburse the franchisee for the night, right? Of course that would be more fair, but the next time the franchisor cares about what is fair will be the first. So, here's how it would work:

    Hotel Compensation for Room: $25-$35

    Points Refunded to Guest: 8,000

    Net Result for Hotel: ($45)-($55)

    In other words, the guest stays at the hotel for free, the franchisor MAKES a profit (from the hotel) if the guest complains AND the hotel directly loses money. Keep in mind that this is ACTUAL money loss that doesn't even take into consideration the possibility of opportunity cost because, in some cases, the room could have been rented to someone else.

    COMPLAINTS

    Finally (at least, for now) let's address guest complaints and WHY the only thing that we cared about was not having complaints that would, "Stick," with the franchise.

    The way that this franchisor worked was that they had complaint, "Quartiles," which referred to how many complaints per 1,000 room nights a hotel would get. I don't know if it still works this way, but at the time, this was NOT even differentiated by chain or class of hotel.

    In other words, since we're cheaper on points (also, on money, but some guests don't seem to care about that) guests that would usually stay at better (name and often in fact) hotels would come use their points with us expecting the same experience...even though that expectation is totally ridiculous for any possible number of reasons.

    Therefore, we effectively became a hotel chain more likely to have a high amount of complaints/1,000 just because we had a bunch of people staying there who, arguably, shouldn't even really be staying there.

    But, the complaints do not just come from the points guests, of course, they can come from anyone. The majority of them came from the points guests, though, because it didn't take them long to figure out that the franchisor would refund their points almost without hesitation...and why wouldn't they? They make money off of the hotel every time they do.

    The most important thing was avoiding the fourth quartile. The good news for us was, despite being MAYBE an ever so slightly better than average hotel compared to the rest of those with the same flag, we were in the first quartile. That takes a lot of preventive and proactive action, though....and maybe a little luck.

    The luck came from the fact that complaints/1,000 goes by room nights, not by number of unique bookings, and we had a lot of weekly and other long-term guests. The benefit there is that if they complained, which they almost never did, it would still only represent one complaint for however many nights, whereas a guest who stayed one night complaining is obviously 1/1.

    The preventive/proactive measures came from showing the guests the rooms ahead of time, ESPECIALLY with points guests. I would not give a points guest a room without personally showing them the room first. These are the sorts of reasons why I worked B Shift despite the fact that most hotel managers work A shift. Anytime I had a company calling about a group contract, or something, I would just have the front desk clerk call me at home or on cell and I would call the company back during the day.

    So, I would show most online bookings (other than TPW's, but even then sometimes) and absolutely ALL points guests the room first and give them the option to cancel the reservation at no charge or with the points fully refunded, whatever the case. Unless we were sold out (90% of ADR thing) there was ZERO benefit to having the free nights guests, as I mentioned, the hotel was risking losing money.

    At that point, the guests would sign a separate form that I offered them the opportunity to either cancel at no charge, or cancel and have the points refunded, whatever the case. Because I did that, even if the guest would complain to the franchisor, the complaint WOULD NOT stick on our complaints/1,000. Better still, even if the franchisor chose to give/refund the guest points, (almost never happened if the guest was offered no charge and declined in the first place) the hotel would not be billed for those because the hotel had already offered a no charge cancellation. That's probably another reason why the franchisor rarely offered points in that event; there was no money to be made from the hotel by doing so.

    So, the key was to offer basically everyone the opportunity to cancel at no charge, even if they hadn't complained about anything. If a guest did complain within at least a non-ridiculous timeframe, (as in, not the following morning) then you just offer them a full refund on condition that they check out of the room within the next fifteen minutes. If you did either of these things and the guest declined your offer, (ESPECIALLY if they signed a separate form stating this) then the franchisor couldn't touch you.

    In many instances, the guest didn't really have a problem with the room, or they did, but they considered it a lot more trivial than they were repping. They would often counteroffer me that they would take a 50% discount and stay. I would say, "We do our best to strive for the utmost in guest satisfaction and would hate nothing more than to have a guest pay ANYTHING for a stay with which they are not satisfied. Therefore, I am extending to you the offer to check out of the hotel at no charge, or you can keep your room at full charge, if you so choose. There is no alternative offer. If you are unsatisfied with the accommodations, then we are only too happy to further refund you and make calls to determine what nearby lodgers have rooms available that may be more to your satisfaction."

    Smart guests wouldn't complain until the following morning. I basically had to give them a discount, or points, if I wanted to avoid them making a complaint to the franchisor that would stick. I used to offer 25% off most of the time, until I realized that most guests thought 1,000 points meant something and would accept 1,000 points---which only cost the hotel ten bucks.

  2. #22
    Duplicate
    Last edited by Mission146; 08-10-2020 at 06:25 AM.

  3. #23
    Sorry about the duplicate.

    We floated between the first and second quartiles, but you REALLY wanted to avoid the Fourth Quartile because the franchisor would start, "First Call Resolution."

    How that worked is that, if a guest made a complaint to the franchisor, the franchisor would be permitted to settle it if the hotel's FIRST offer was not satisfactory to the guest. Generally, the franchisor would then solve it with either a full refund or the points equivalent of a full refund...which obviously nobody is going to refuse. Additionally, when in fourth quartile, every complaint that even went to the franchisor cost the hotel an additional $25. You had six months to get out of 4Q, otherwise, you would be delisted from the franchise website and they would take down your page completely.
    Last edited by Mission146; 08-10-2020 at 06:30 AM.

  4. #24
    Gold LMR's Avatar
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    I think that the word is, franchiser.

    franchiser

    noun
    The definition of a franchiser is a company that provides franchise rights to those who want to own a franchise.
    An example of a franchiser is the parent UPS Store company giving someone permission to start their own UPS Store.

    Now I wonder that there are other distinctions, as is often the case.
    Lustin' lutins (from) NUTS:LI (Lichtenstein), unlist insult, until's sunlit!


    p
    M
    u
    r
    taRd

    ---> MR. L(osing).


    Shut it down, LMR. = Low Mind thRust, (invar.)

    555 = 111 + 4*111 = 15*37, or 37*15, as 153, and 7, or, 371, and 5. As 153 on 371, to 5/7 left, as 6 +/- 1.

    3/21 to 8/22 is 153 + 1 days. 321 = 107*3 + 0; 123 = 3*71 + 0. To 1/0. 822 = (-1 + 7)(37 + 100); 228 = 57[6 - (1 + 1)], ---> 11411. 15[3^2] = 153 + (5 + 1). 154 days is ~ 42.08% of year 2020. 451 = 11*41^1.

  5. #25
    Originally Posted by LMR View Post
    I think that the word is, franchiser.

    https://www.merriam-webster.com/dictionary/franchisor

    I think the phrase is suck my dick.

  6. #26
    Originally Posted by LMR View Post
    I think that the word is, franchiser.

    https://www.merriam-webster.com/dictionary/franchisor

    I think the phrase is suck my dick.

  7. #27
    I don't know why this is posting twice every other time, sorry about that. It's not intentional.

  8. #28
    Gold LMR's Avatar
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    I think the phrase is, suck the Wizard's dick.
    Lustin' lutins (from) NUTS:LI (Lichtenstein), unlist insult, until's sunlit!


    p
    M
    u
    r
    taRd

    ---> MR. L(osing).


    Shut it down, LMR. = Low Mind thRust, (invar.)

    555 = 111 + 4*111 = 15*37, or 37*15, as 153, and 7, or, 371, and 5. As 153 on 371, to 5/7 left, as 6 +/- 1.

    3/21 to 8/22 is 153 + 1 days. 321 = 107*3 + 0; 123 = 3*71 + 0. To 1/0. 822 = (-1 + 7)(37 + 100); 228 = 57[6 - (1 + 1)], ---> 11411. 15[3^2] = 153 + (5 + 1). 154 days is ~ 42.08% of year 2020. 451 = 11*41^1.

  9. #29
    Gold LMR's Avatar
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    Originally Posted by Mission146 View Post
    I don't know why this is posting twice every other time, sorry about that. It's not intentional.
    Just delete one of them.
    Lustin' lutins (from) NUTS:LI (Lichtenstein), unlist insult, until's sunlit!


    p
    M
    u
    r
    taRd

    ---> MR. L(osing).


    Shut it down, LMR. = Low Mind thRust, (invar.)

    555 = 111 + 4*111 = 15*37, or 37*15, as 153, and 7, or, 371, and 5. As 153 on 371, to 5/7 left, as 6 +/- 1.

    3/21 to 8/22 is 153 + 1 days. 321 = 107*3 + 0; 123 = 3*71 + 0. To 1/0. 822 = (-1 + 7)(37 + 100); 228 = 57[6 - (1 + 1)], ---> 11411. 15[3^2] = 153 + (5 + 1). 154 days is ~ 42.08% of year 2020. 451 = 11*41^1.

  10. #30
    Originally Posted by LMR View Post
    I think the phrase is, suck the Wizard's dick.
    Just in that post, you spent more time thinking about Wizard's dick than I ever had at any point prior.

  11. #31
    Gold LMR's Avatar
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    Originally Posted by Mission146 View Post
    Originally Posted by LMR View Post
    I think the phrase is, suck the Wizard's dick.
    Just in that post, you spent more time thinking about Wizard's dick than I ever had at any point prior.
    Just in that one post, well, summed up everything about you.
    Lustin' lutins (from) NUTS:LI (Lichtenstein), unlist insult, until's sunlit!


    p
    M
    u
    r
    taRd

    ---> MR. L(osing).


    Shut it down, LMR. = Low Mind thRust, (invar.)

    555 = 111 + 4*111 = 15*37, or 37*15, as 153, and 7, or, 371, and 5. As 153 on 371, to 5/7 left, as 6 +/- 1.

    3/21 to 8/22 is 153 + 1 days. 321 = 107*3 + 0; 123 = 3*71 + 0. To 1/0. 822 = (-1 + 7)(37 + 100); 228 = 57[6 - (1 + 1)], ---> 11411. 15[3^2] = 153 + (5 + 1). 154 days is ~ 42.08% of year 2020. 451 = 11*41^1.

  12. #32
    Originally Posted by Mission146 View Post
    I don't know why this is posting twice every other time, sorry about that. It's not intentional.
    In this case, it was a good double post!

  13. #33
    Finally (For Now):

    Anyway, there are some savings to be had if you have both the inclination and the ability to figure out ways to optimize these systems. The majority of hotel guests either don't, or can't, so the ultimate result is that they end up paying significantly more money than they otherwise would have were all of these things not in place.

    The thing to understand is that the hotel would be showing an online rate of $80, "Rack Rate," all in the hopes that the hotel would realize direct revenues (after TPW, franchise costs, complaints, etc. etc.) of about $40 per room rented. Like I said in the WoV thread, this rate + AAA Discount + TPW + Rewards Member would result in about an effective rate of $47.16 for the hotel. Slightly less if they were also using the franchisor's credit card, because you know that's going to be an additional percentage to the hotel.

    After that, you would then have the variables of potential guest complaints and the semi-variables of other costs associated with being a franchisee, the biggest of which was the annual flat fee. All told, we charged a rack rate of $80 hoping to get $40 of that to the point where now you only have the expenses related to the physical property.

    Or, put more simply, half of the rate was due to all of this assorted bullshit. If we were just a hotel sitting there without a franchise, (not that many hotels can get by this way---which is why you are a franchise to begin with---necessary evil) then we'd probably just be charging $50 (before tax) on that room and be pleased as punch to be making significantly more in profits.

  14. #34
    Great posts, Mission. The only times I ever contacted the franchisor is when missing points on a stay. I never thought about trying to hustle a franchise by complaining about the room. I pretty much don't like getting tarnish like that on my chrome finish. I've thought about giving some bad reviews of a couple of hotels on TripAdvisor but never followed through.
    "More importantly, mickey thought 8-4 was two games over .500. Argued about it. C'mon, man. Nothing can top that for math expertise. If GWAE ever has you on again, you can be sure I'll be calling in with that gem.'Nuff said." REDIETZ

  15. #35
    Thanks, The Boz!

    Thanks, Mickeycrimm!

    I definitely appreciate that. I'd also say that you have no need to do it because, after reading all of your posts, it seems that you have optimized the system basically as well as I ever could---and that's with me having worked in the industry for several years. For other people, bitching to the franchisor about everything is the only hustle they know.

    Although, there is a small degree of satisfaction in them attempting to do so (and thinking it will work) when I have already offered them a full refund of cost/points to simply leave and they declined.

    Occasionally, a guest will get tagged as, "Frequently unsatisfied," and then nothing happens to the hotel if that guest complains. They'll also only ever be offered points, if the franchisor even chooses to give them those---which they often won't. People like that eventually realize that the game is up and decide to go be some other franchise's problem until they burn that one out. In fact, one representative for the franchisor once accidentally let it slip to me that a guest had more complaints than she actually had completed stays. On a few occasions, hotels would let her cancel her reservation at no charge, but then she would STILL call and complain about the way they, "Talked to her." I came to find that out only because that was precisely what she attempted to do with us.

    Of course, the franchisor will NOT tell you when you are dealing with such a guest unless THEY have billed you for points/refund and you call and ask them directly. At that point, they'll reverse the billing to the hotel on that one.

  16. #36
    This is a tip on what to do when using the app to spend reward points on booking a room. Sometimes, during busy days for the hotel it will say "no rooms available" when you try to pay with points. But if you switch back to Best Available Rate or Senior Rate you can see that you can book a room if you pay for it.

    1. Switch it back to reward points and try to book the room again.

    2. If that don't work switch it back to best available or senior rate and proceed like you are going to pay for the room. Except don't book it. Switch back to reward points and try to book it that way again.

    3. Keep doing it over again until it lets you book the room for reward points.

    There is something in the app that tries to prevent you from using points during their really busy nights but if you persist you will get it anyway.
    "More importantly, mickey thought 8-4 was two games over .500. Argued about it. C'mon, man. Nothing can top that for math expertise. If GWAE ever has you on again, you can be sure I'll be calling in with that gem.'Nuff said." REDIETZ

  17. #37
    Originally Posted by mickeycrimm View Post
    This is a tip on what to do when using the app to spend reward points on booking a room. Sometimes, during busy days for the hotel it will say "no rooms available" when you try to pay with points. But if you switch back to Best Available Rate or Senior Rate you can see that you can book a room if you pay for it.

    1. Switch it back to reward points and try to book the room again.

    2. If that don't work switch it back to best available or senior rate and proceed like you are going to pay for the room. Except don't book it. Switch back to reward points and try to book it that way again.

    3. Keep doing it over again until it lets you book the room for reward points.

    There is something in the app that tries to prevent you from using points during their really busy nights but if you persist you will get it anyway.
    Sometimes.

    A few of these occasions might have just been by happenstance as a cancellation might have been put in (or a room out of service placed back in service) as you were doing this, by coincidence.

    However, at least as relates to the hotel franchise (may or may not be Choice Hotels) I'm familiar with, we had twenty, "Blackout," days that we got a year. The way the blackout dates worked was that Free Nights bookings would be completely locked out as soon as we had two of them. If you did manage to get around that somehow, the franchise would actually have to pay us 100% of the ADR for the room for that night---whether we sold out or not--- because it was not supposed to happen. I think I only had it happen once as it should be impossible for another to book if we already have two.

    Another thing that could have happened was (around the time you were doing it) someone else was looking to use points, but then decided not to, thereby making the room available for you to book online.

  18. #38
    Great recap on the hotel industry once again Mission. One thing I've never really understood, with all my extensive travels throughout US and CAN, is there are numerous hotels, that I come across in different areas, that seem to do everything in there power, to be completely irrational, in regards to pricing and suffer the apparent consequences, with consistent occupancy levels, that appear to be pathetic like sub 20-30% even as low as teens. My gauge is by amount of rooms vs cars in parking lot. I understand that some people, have no vehicle and some places have more weekly/monthly( live in residents) Factoring all that into the mix( pre covid) my question is, are there any benefits for these owner/managers to be completely ludicrous, in regards to pricing themselves out of the market? I can't think of any, other then poaching for suckers. I would rather have 70-100% occupancy, at slightly below market, then 0-30% trying to find complete imbeciles. For the record, I'm speaking for areas that I frequent regularly and know very well, on both sides of the border. Were talking amounts that sometimes are up to 400% more then the market dictates, for the time of year, day of week and region in question. Your take from a managerial stand point, would be interesting. I'm totally puzzled by this.

  19. #39
    I'm a hotels.com fan. The rewards are simple to understand. Stay 10 nights get one free up to the average cost of the previous 10. I like not being tied to a particular chain and it works all over the world. When you get gold or whatever there's some pretty damn good special offers sometimes.

  20. #40
    Trivago is a great site. All those hotel booking companies competing against each other for the best price. But maybe if you take a closer look it's not so competitive. Who owns what?

    Expedia Group owns:

    Expedia.com
    HomeAway
    Hotels.com
    Hotwire.com
    Orbitz
    Travelocity
    Vrbo
    Trivago

    Booking Holdings owns:

    Priceline.com
    Kayak.com
    Booking.com

    It's pretty much a front to make it look like there's lots of competition.
    "More importantly, mickey thought 8-4 was two games over .500. Argued about it. C'mon, man. Nothing can top that for math expertise. If GWAE ever has you on again, you can be sure I'll be calling in with that gem.'Nuff said." REDIETZ

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