A room overlooking the White House at the posh Hay-Adams Hotel last weekend could have been had for $275, including breakfast for two and free parking. Normally, the rooms would have fetched $375, but a hotel reservation agent described the discount package as "the best we've ever offered."
On the other hand, maybe it wasn't.
With a little prodding from a would-be guest who telephoned the hotel last week, a reservation agent offered to sell the $275-a-night room, along with the extras, for $198 -- an on-the-spot discount of 28 percent.
Similarly, a top-of-the-line suite at the Ritz-Carlton Hotel on Massachusetts Avenue NW was offered at $350 to an inquiring caller.
After some bargaining, however, the price began to fall. Final offer: The Ritz was willing to rent its $350 suite for $250, including dinner for two at the hotel's Jockey Club restaurant.
Local hotels are once again in the midst of a price war, but it's more than just a response to the seasonal slump. In addition to the usual winter blahs, hotels this year are grappling with an extraordinary decline in business that industry representatives blame on the recession and tourists' fears of war-related terrorism.
As a result, local hotels are becoming increasingly willing to extend steeper-than-usual discounts and perks like free parking, meals and champagne to would-be guests who take the trouble to do a little haggling.
While it is a boon to travelers, the current round of rate-slashing seems likely to cut further into the financial health of the local visitor industry, which collectively is the largest private-sector employer in the District and a major source of sales-tax revenue.
Although the number of rooms booked throughout the District was virtually unchanged in 1990 compared with the year before, the hotel industry's gross taxable sales fell 5.5 percent during 1990 to $515 million, according to the D.C. Department of Finance and Revenue. That means local hotels were cutting their rates sharply to attract the same amount of business.
"Slashing rates has a direct effect on a hotel's ability to make its debt" payments, said Peter Carlsen, a senior manager at Kenneth Leventhal & Co., a real-estate consulting firm in Washington. "Consequently, there's going to be a falling out... . Spring is definitely going to be make or break time in terms of a hotel's ability to service debt and stay solvent."
Carlsen said a number of local hotels, which he did not identify, already have begun negotiations with lenders to restructure their finances.
In the meantime, the informal restructuring of hotel rate cards continues. Negotiating favorable rates has long been the staple of corporate meeting planners and travel agents. But the willingness of many hotels to offer similar discounts to a perfect stranger seeking a reservation for a single room over the telephone is a sign of how desperate the industry is this season to fill its rooms.
Of course, hotels don't volunteer or advertise that they're willing to haggle.
"It's really a kind of insider's knowledge," said Lynda Webster, director of sales and marketing for the Watergate Hotel. Most hotels, she said, balk at making the policy widely known because it not only hurts business but also is bad public relations when guests find out they are paying more for a room than someone else down the hall.
"Don't let my boss hear me telling you this, but you never, ever should accept the first rate that a hotel quotes you," said another hotel executive, who asked not to be named. "When things are slow, as they are now, anyone can get" a lower price.
In fact, in an informal sampling of 15 hotels in the District and Northern Virginia by a Washington Post reporter last week, 10 were willing to cut their rates or provide room upgrades at no extra cost after the hotel's first price was resisted. The five hotels unwilling to cut prices said they were already offering special, low-rate weekend packages and could go no lower.
The Washington Hilton, for example, initially offered a standard room at $166 for a Friday night stay but quickly cut it to $89, adding a continental breakfast to the package. It finally proposed upgrading the room at no extra cost. At the downtown Vista Hotel, the hotel originally proposed $99 a night. When a counter-offer of $89 was proposed, the hotel said it would charge $80.
"Hotel rates aren't set in a way to hide anything or deceive the customer," said Bill Edwards, the Hilton's general manager. "... This isn't like buying a car where you walk into it knowing it's a game. It's a question of supply and demand. You close or open your discounts based on what's available at what time."
Edwards and other hotel managers describe their hotel rooms as "perishable"; that is, each night they aren't sold is a sales opportunity lost forever. For this reason, hotels, like airlines, engage in "yield management," raising and lowering their prices constantly to take maximum advantage of changes in supply and demand.
Typically, winter weekends in Washington are the slowest time of the year at hotels, and that means guests have their greatest negotiating leverage then. During the peak season in the spring, however, hotels usually regain the advantage and resist price reductions.
"January wasn't that bad a month, but what is looking unfortunate for us is the spring," said Emily Durso Vetter, executive vice president of the Hotel Association of Washington. "What's happening, unfortunately, is that some groups are thinking about or are canceling spring trips. The spring for us is like Christmas in the retail business -- if you don't make it in the spring, you won't make it for the year."