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What Is Your Decision in Managing Room Rates under Unexpected Circumstances?

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Tens of thousands, likely millions of, travelers are stranded in airports around the world due to the volcanic eruptions in South Iceland. Saturday, I heard news about people who live close by Newark Airport extending their kind assistance to stranded passengers. They offer their homes to those extremely-exhausted travelers for showers and even a nap.

This morning, I also heard another piece of news about hotels charging outrageous rate to those travelers. For example, a hotel in Hong Kong Airport increased its room rate from €250, to €460 in the middle of the day, and then to €800 in the evening. A hotel room in Sydney Airport changed its rate from $150 Australian Dollars ($138 USD) on Friday to AU $350 on Saturday. I understand how revenue management works in a hotel, and I know better that managing a hotel is running a business. There is no way that a hotel will, or should, offer a free room. I just wonder if you are managing an airport hotel, how you would control the room rate in a similar situation. How about during a snow storm?

References:
USA Today: http://tinyurl.com/linchikwok04192010
The picture was copied from: http://tinyurl.com/linchikwok04192010P
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  1. Linchi KwokApril 19, 2010 at 1:26 PM

    For more discussion about this issue, you may visit "the ash for cash hotel grab" at HotelNewsNow.com via the following link:

    http://www.hotelnewsnow.com/Articles.aspx?ArticleId=3163&ArticleType=35&PageType=News

    ReplyDelete
  2. Sandy LinApril 19, 2010 at 7:30 PM

    It makes sense to charge a higher rate because those who were stuck in the airport definitely need somewhere to stay. However, this is not what hospitality is about. Those customers probably went to those hotels because they had no choice. Due to the high charge, they probably won't visit again in the future. Yes, the hotels are gaining profit our of it, but they are losing customer satisfaction.

    ReplyDelete
  3. Linchi KwokApril 20, 2010 at 10:18 AM

    That's a good point, Sandy. New Yorkers are also extending our hospitality to stranded passengers:

    These NYC Hotels Are Offering Discounts For Ash-Affected Travelers

    http://www.hotelchatter.com/story/2010/4/19/163921/614/hotels/These_NYC_Hotels_Are_Offering_Discounts_For_Ash_Affected_Travelers

    ReplyDelete

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