How are hotel rates actually calculated and how come they can vary so much for the same room?
Hotel Rates
The Blue Traveler asked:
For example, a hotel can be $89 in Chicago one week, then $300 the next for the exact same room. I know that this is most simply explained by “supply vs. demand” but how is this legal? Why isn’t there a cap to how high rates can go?
Georgia
For example, a hotel can be $89 in Chicago one week, then $300 the next for the exact same room. I know that this is most simply explained by “supply vs. demand” but how is this legal? Why isn’t there a cap to how high rates can go?
Georgia
November 14th, 2008 at 8:23 am
You’re right that it has to do with supply/demand and occupancy rates. The reason they can get away with this is simple….it’s not regulated. Just as there is no rent control in Chicago, there is no control on what a hotel can charge for a room.
November 16th, 2008 at 10:12 am
Capitalism is why there is this change, why would you want the Goverment telling business what they can charge for a service. It is up to you to find the best rates and there are a lot of them out there you just need to do a little looking on the Internet. I
Also remember that local taxes are applied to a lot of room rates so look hard at this extra tax as well before getting a room.
November 18th, 2008 at 7:06 pm
It is indeed a question of supply/demand. There are also what Hotels call “seasons” like the holidays or summer time that they increase the prices when they KNOW people will be vacationing more. But yes it’s also that it is not a regulated indistry and it’s a free market economy, so the best thing to do is shop around, and book early if you can, since doing that usually saves alot of money.