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(Slate)   Why do hotel rooms cost so much more than houses or apartments?   (slate.com) divider line 26
    More: Obvious, TPM Media, Matthew Yglesias, commercial real estate, tax deductions, excise taxes, apartments, central business district  
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10374 clicks; posted to Main » on 27 Nov 2012 at 10:21 AM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-11-27 10:22:42 AM  
6 votes:
Supply and demand.


/ next question, please
2012-11-27 11:00:10 AM  
2 votes:
What I want to know is, why the fark is it that the more expensive the room is, the less free incidentals or services you get? Yet cheap hotels fall all over themselves to give it to you? Makes no damn sense; If I'm paying $300 a night for a bed, I'm not paying $20 a day for farking wifi access.
2012-11-27 10:58:53 AM  
2 votes:

mechgreg: I think if it had daily maid/laundry service apartment costs would be comparable. There is also the wear and tear factor, people won't treat a hotel room the same way they treat there own home. It is the same reason renting a car for the weekend would be higher than a monthly car payment.


Being in the temp housing biz for many years... this is certainly part of it. Vacancy costs are another part that they left out of TFA. Vacancy throughout the year at a hotel is going to be a lot higher than at an apartment building. And every day a unit at either one is vacant it costs a lot more money than you might think.
2012-11-27 10:55:59 AM  
2 votes:

thornhill: mechgreg: I think if it had daily maid/laundry service apartment costs would be comparable. There is also the wear and tear factor, people won't treat a hotel room the same way they treat there own home. It is the same reason renting a car for the weekend would be higher than a monthly car payment.

Maids are paid minimum wage; that's probably the least of their labor expenses.

As for laundry, even high end hotels (e.g. the W) now request that you do not ask for new towels during your stay so to conserve energy.

As for wear and tear, I think most hotels defer as much maintenance as long as possible so they can renovate all of the rooms at once, making the maintenance more cost effective.


Kind of doubting that altruism
2012-11-27 10:50:20 AM  
2 votes:
I'd say because electricity, water, cable, furniture, televisions, towels, and soap are not typically included in rent/the purchase of a house... and the article doesn't even mention those obvious costs.
Conclusion: This article, while fully unnecessary to begin with, sucks.
2012-11-27 10:49:50 AM  
2 votes:

mechgreg: I think if it had daily maid/laundry service apartment costs would be comparable. There is also the wear and tear factor, people won't treat a hotel room the same way they treat there own home. It is the same reason renting a car for the weekend would be higher than a monthly car payment.


Maids are paid minimum wage; that's probably the least of their labor expenses.

As for laundry, even high end hotels (e.g. the W) now request that you do not ask for new towels during your stay so to conserve energy.

As for wear and tear, I think most hotels defer as much maintenance as long as possible so they can renovate all of the rooms at once, making the maintenance more cost effective.
2012-11-27 10:32:07 AM  
2 votes:
I managed a Residence Inn about 15 years ago. At that time it cost us $7.00 to clean a one bedroom or studio suite and $15 for a 2 bedroom suite. When it got late I'd sell one night stays to walk ins as low as $29.

If you walk in to a hotel at night ask if they are full, ask for best available rate and then ask if they can go any lower since its getting late. They will.
2012-11-27 10:27:42 AM  
2 votes:
I rent a 2bdrm Cabin w/fireplace, w/d, 1ba. $650 per month, Oct-April. May 1st it becomes a vacation rental for the summer, and goes for $400 per night.

Tourism... how does it work?
2012-11-27 10:24:13 AM  
2 votes:
Because they can
2012-11-27 08:26:55 PM  
1 votes:
You can stay in any number of on-strip Las Vegas resorts for $25-$35 a night mid-week. It's also pretty easy to pay $80-$100 a night for the same room on a weekend or during a major trade show like CES. Of course, you can also step it up and pay $300-1500 a night at one of the upscale places. Since the strip is only about 4 miles long and is jammed with 24/7 trains, buses, cabs, and car-rental desks, the precise location of your suitcase is not that important.
2012-11-27 11:35:13 AM  
1 votes:
Besides the aforementioned maid services, hotels renovate frequently. Carpets are typically replaced every 2-3 years (or as needed), with a full renovation about every 8.

And finally, the hotel isn't 100% occupied 100% of the time. Neither are most apartments, but most hotels during the week or slow seasons are often fairly unoccupied but yet incur much of the same overhead.

That said, I'm a fan of AirBNB. Great way to stay in a city like SF or NYC.
2012-11-27 11:02:49 AM  
1 votes:

thornhill: Tigger: thornhill: Hotels simply have a monopoly in major tourist cities. You have no other options of where to stay.

That is awesomely wrong. Awesomely.

'Hotels' are a category containing multiple separate fungible competing entities, information about pricing and quality being freely available,. They are close to the perfect opposite of a monopoly.

If you don't think there is any kind of collusion when it comes to pricing I have a bridge to sell you.


There isn't the collusion you're imagining. I worked for Marriott for many years and not only are hotels competitive against each other, but the brands within the company even compete against each other! It sucked to find out the Residence Inn down the street was undercutting us for the same clients, but it absolutely happened.
2012-11-27 10:59:36 AM  
1 votes:

thornhill: Tigger: thornhill: Hotels simply have a monopoly in major tourist cities. You have no other options of where to stay.

That is awesomely wrong. Awesomely.

'Hotels' are a category containing multiple separate fungible competing entities, information about pricing and quality being freely available,. They are close to the perfect opposite of a monopoly.

If you don't think there is any kind of collusion when it comes to pricing I have a bridge to sell you.


Even if I grant you there is pricing collusion they are STILL not a monopoly.

In fact if you have two or more companies colluding on price guess what that cannot possibly be?

A monopoly.

(On a separate note the likelihood of pricing collusion is miniscule - not least as evidenced by the different prices - however collusion itself necessarily precludes the possibility of a monopoly so we need not address how silly that idea is).
2012-11-27 10:49:02 AM  
1 votes:

thornhill: Hotels simply have a monopoly in major tourist cities. You have no other options of where to stay.


That is awesomely wrong. Awesomely.

'Hotels' are a category containing multiple separate fungible competing entities, information about pricing and quality being freely available,. They are close to the perfect opposite of a monopoly.
2012-11-27 10:47:32 AM  
1 votes:
I've worked in corporate meeting/special event planning for four years now. Hotel prices (depeding on location) will shock the hell out of you. I'm not just talking rooms here; EVERYTHING is farking expensive in some cities.

We've had meetings where an apple would cost $5++ (plus tax/gratuity) or a gallon of coffee is $130++. I used to be shocked by the pricing, now I have to see $50 for coffee as "cheap".

Why is it so expensive? Because it can be and they know we'll pay whatever they ask (mostly).
Unfortunately, it's the cost of business unless you want all of your meetings at the Motel 6 in Omaha.
2012-11-27 10:44:14 AM  
1 votes:
I really detest the author Matthew Yglesias.

I once heard him described as a guy who as an undergraduate could dominate conversations in the Harvard dining halls and who hasn't progressed past that level of clever superficiality.
ZAZ [TotalFark]
2012-11-27 10:43:38 AM  
1 votes:
Because any hotel that charges less than $50 per night is no better than sleeping in my car. Personal observation.

It makes more sense to take my 15 spare rooms and directly market them to price-sensitive customers by using a specialized reseller like Hotwire.

There's a lawsuit alleging that hotels imposed minimum price rules on resellers.
2012-11-27 10:40:23 AM  
1 votes:
Hotels simply have a monopoly in major tourist cities. You have no other options of where to stay.

In a city like Paris, $250/night will get you something smaller and dingier than a Hampton Inn at half the cost in most American cities. And during peak tourist season, the prices are even more extreme -- I've stayed at W Hotels in the US for less than what total crap holes in Paris wanted per night in the late spring. And that's what really gets me -- it's a slap in the face to charge so much money for a hotel that's falling apart.

Last time I was in Paris I rented a studio apartment for 14 days at 400 euros/week. It was larger than any hotel in the sub $400 price range, had a full kitchen, laundry was around the corner, and a supermarket was in the bottom floor.
2012-11-27 10:40:15 AM  
1 votes:
A old rule of thumb for the hotel / rent price is, "a hotel room is 10% of a months rent."
And it seems to work pretty well.
2012-11-27 10:38:56 AM  
1 votes:
"...and more than 1,000 of you are so farking stupid that you wanted me to explain why hotels are so expensive."

FTFT
2012-11-27 10:29:08 AM  
1 votes:

sulco: Because sex stains and sticky tv remotes aren't free.


Came for this
2012-11-27 10:27:50 AM  
1 votes:
.... that question had to be asked? (reads article) and it's not even in relation to the serious question of poor and non-creditworthy families having to use hotels because motels as primary residences because they don't have steady income and many corporate places won't take you if you have a bankruptcy/eviction/bad credit???

what a '53%ers/first world problems' article.
2012-11-27 10:26:51 AM  
1 votes:
Really? 1000 people asked that?
2012-11-27 10:26:25 AM  
1 votes:
Because MAID SERVICE /OVERHEAD biatchES
2012-11-27 10:26:25 AM  
1 votes:
I think if it had daily maid/laundry service apartment costs would be comparable. There is also the wear and tear factor, people won't treat a hotel room the same way they treat there own home. It is the same reason renting a car for the weekend would be higher than a monthly car payment.
2012-11-27 10:22:38 AM  
1 votes:
Because sex stains and sticky tv remotes aren't free.
 
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