Hotels Raise Prices, Eliminate Services

Cutting services at customer expense is no longer limited to the airline industry. While travelers are trying to reduce expenses when going on vacation, Hotels are reacting accordingly. In order to increase profits, hotels are focusing on what customers value most like free parking, free Wi-Fi and free breakfast and eliminating little used amenities including business centers, minibars and spas.

Editorial director Andrew Young of Travelzoo states to Marketwatch "Much like airlines, hotels are looking for ways to maximize ancillary revenue and reduce costs," referring to the Hilton Hawaiian Village dropping room service in October.

Intercontinental Hotels Group is adding 52,000 rooms in more than 454 hotels via its value-branded Holiday Inn Express line. Travelers spend less time in their rooms meaning once valued perks are no longer important to the typical hotel customer.

"The Quail Lodge in Carmel Valley, Calif., for example, opened in March after a three-year, $28 million renovation, and it eliminated room service, front door valets and bellhops. But its room rates include breakfast, Internet and parking," says George Hobica in an interview with Marketwatch.

That doesn't mean hotels are operating on razor thin budgets struggling to make ends meet. To provide certain amenities at high end hotels, room rates appear to be on the rise. Average daily room rates in Seattle have risen 34% this summer compared to a year ago while San Francisco has seen am increase of 26% as reported by travel website Orbitz.com.

Availability and room rates are a reflection of consumer demand and hotels are using electronic booking to facilitate dynamic pricing. With prices changing multiple times per day, consumers have to more price conscientious than ever when planning a trip for yourself or with the family.