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Those "lowest rate" guarantees on most Web sites aren't worth much. Hotels offer almost as many rates as they have guests! The rate you pay depends on a variety of factors, including when and where you book your room, how you pay and how much work you're willing to do. Not surprisingly, most hotels around the world employ the same distribution and pricing strategies. Here's a quick guide to how hotels price their rooms and some tips on getting the best deal.

'Rack Rate'

Every hotel has what is known in the industry as "rack rate", also known as full rate, published rate or just plain sucker rate. These are the top rates a hotel charges their guests. While few guests actually "pay rack", hoteliers use these rates as a basis for discounting. Most hotels routinely offer discounts ranging from 10-30% simply for the asking. Many business hotels offer bigger discounts on weekends, when few business people travel. Likewise, resort hotels often discount their rates during the week and slash their rates during the off-season. Obtaining these discounted rates is often simply a matter of requesting the "corporate rate", "weekend package", or "low-season discount". Most hotel chains ofer competitive rates on their Web sites if for no other reason than to avoid paying commission to the middleman! But it's rarely the lowest rate available.


Even when hotels claim to be fully booked, or refuse to discount their rates, there is usually a way to book a room and save money in the process. Nearly every large hotel sells blocks of rooms to tour operators and discounters, sometimes for as much as 70-80% below rack. These companies pay in advance and receive an "allocation", a guarantee of availability of a certain number of rooms. Tour operators then resell these rooms as part of an air/hotel package or group tour. Discounters simply add a mark-up of $10-100 per room and resell them to travel agents or directly to the public. The guest pays the tour operator, travel agent or discounter directly, receiving a voucher to present upon check-in.

While it is sometimes possible to save 50% or more off rack by purchasing rooms from a discounter, you sacrifice some flexibility. If your plans change, you may not be entitled to a refund, and if you decide to stay longer, the hotel may not honor the discounted rate for the additional nights. Buying vouchers from a discounter is not worth the aggravation or risk to save $10 per night at the Holiday Inn, but it can knock off $150 per night at a luxury resort!

Finally, after you have done your homework, it sometimes pays to contact the hotel directly. Speak to the Front Office Manager or the Director of Sales. Tell her the rate you found and ask if she will honor it. She knows what rates are available in the marketplace and will frequently match it if you ask nicely. (After all, she prefers to get your money directly and not pay commission to a middleman!) You may even receive an upgraded room or other perks at no additional charge. Of course you are much more likely to find a receptive ear if you are staying for a week rather than just one night.

A Note About Our Hotel Guide

A World Adventures Review This symbol designates that a hotel has been reviewed and recommended by our staff. Unlike some Web sites that simply post a hotel's sales brochure in exchange for a fee, World Adventures personally visits hotels in every price range, checking rooms, talking to management and staff, and generally making a nuisance of ourselves. All our reviewers use a simple criteria when selecting hotels: would Mom stay here? For every hotel we recommend, 4 or 5 don't make the cut! Only hotels that make our recommended list receive this designation. You'll find our recommended hotels in our Hotel Guide.

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