Hotwire and Hotels.com Report Dropping Rates

Hotwire reported the top 10 spots with the highest hotel price reductions, which include tourist meccas like Las Vegas, Los Angeles and Miami. According to Hotwire (complete with Hotwire sampling):

 Rank    Hotel Market            Price Drop     Hotwire Deal, US$/Night
      1     Houston, TX                 30%           4-star       $83
      2     Jacksonville, FL             22%           4-star       $75
      3     Orlando, FL                  19%           4-star       $65
      4     Miami, FL                     19%           4-star       $92
      5     Phoenix, AZ                  18%           4-star       $66
      6     Portland, OR                 17%         3.5-star      $78
      7     Las Vegas, NV              17%         4.5-star      $94
      8     Oahu, HI                       16%           3-star       $78
      9     Los Angeles, CA            13%         3.5-star      $77
     10    Vancouver, BC              13%           3-star        $70

Hotwire estimates that hotels in the Sun Belt have been most affected by the recession, I guess because aside from the drop in business travel, families are staying close to home. Similarly, Hotels.com, a division of Hotwire competitor Expedia Inc., also released its Hotel Price Index recently, which reported that Las Vegas, with a hotel rate drop of 30 percent, had the highest decrease in the West. Closely following were Juneau and Anchorage at 26 and 22 percent. Alaska, Hawaii, Washington and California were the states with the highest hotel rates. The index reports on actual prices paid for hotel rooms.

Although some of the data differs (Hotels.com says that the average hotel rate in Las Vegas is $82 a night, rather than Hotwire’s $94) both seem to be saying the same thing — hotel rates are dropping, even in popular destinations to get guests to fill rooms.

What’s odd is that when airlines are boosting fees and predicted to raise fares, hotels are projected to keep dropping rates. Previously I’ve written about how hotels seem to be taking up the slack for travelers — if airfares are up, hotel rooms rates go down — to keep a steady stream of hotel business. In fact, many hotels are bundling amenities and packages to show travelers all they get for a set price.  According to Jan Jones, of Harrah’s Entertainment, it appeals to visitors on a budget.

Perhaps it’s because hotels are part of the hospitality industry that they seem to want to attract customers, while airlines seem less concerned about customer service or amenities that may attract passengers. We’ll soon see which approach yields better results once the recession ends.