The Washington Post

In tough times, area hotels turn to ‘mystery’ bookings

It wasn’t until Nicole Luke and her husband, in search of a quick getaway last month, reserved and paid for a hotel room through that they found out where they would be staying.

“I have to admit, I was a little scared about the mystery of it,” said Luke, who runs the Web site

She needn’t have worried. The couple ended up at a three-star Doubletree by Hilton Hotel, just one block from the concert they were attending at the Fillmore Silver Spring.

Area hotels are increasingly courting travelers like the Lukes, who value low prices over brand loyalties, through mystery booking options on Web sites such as Hotwire and Travelocity. Customers are given very basic information — the general location of a hotel, for example, and a rundown of amenities — but do not find out the name of the discounted hotel until after the reservation has been finalized.

The sites, which provide deep discounts to customers, are a source of little profit to hotels. But when business is slow, hotel owners say mystery bookings offer something invaluable: A chance to fill empty rooms without publicly lowering prices.

“Once you lower your daily rate [in the open], it’s really hard to get it back up again,” said Henrik Kjellberg, president of the Web site Hotwire. “What mystery bookings allow is for hotels to get rid of rooms without destroying their pricing image.”

More than 28,000 hotels currently offer mystery bookings through Hotwire, up from 24,000 two years ago, Kjellberg said.

Washington area hotels have been particularly hard hit in recent months, as leaner corporate budgets, lower per diem rates and government shutdown-related cancellations have taken a toll on the local hospitality industry.

“There is still some uncertainty with the government, even though the budget has passed,” said Mark Jennings, general manager of Hotel Palomar in Dupont Circle. “We try not to do a lot of opaque bookings, but it is a good thing when business is really, really slow.”

Like Jennings, other area hoteliers said they limit the number of mystery bookings because they can only afford to offer a small percentage of rooms at rock-bottom prices.

At the Comfort Inn Gunston Corner in Lorton, for example, just five of the hotel’s 129 rooms are allocated for blind bookings on any given night, according to general manager Susan Sta. Cruz.

“You don’t want to fill up too many of your rooms for $50 when they generally go for $220,” Sta. Cruz said. “You have to constantly think about how low you want your prices to be.”

It can be a tricky balance, even for large hotel companies. Many spend millions of dollars creating and operating rewards programs in hopes that customers will keep coming back. The rise of third-party Web sites complicates that proposition.

In a September filing with the Securities & Exchange Commission, McLean-based Hilton Worldwide cautioned that the popularity of third-party Web sites may ultimately cut into the company’s profits.

“Consumers may develop brand loyalties to the intermediaries’ offered brands, Web sites and reservations systems rather than to the Hilton brands and systems,” the company said. “If this happens, our business and profitability may be significantly impacted as shifting customer loyalties divert bookings away from our Web sites.”

Even so, area hoteliers say booking sites have become an integral part of their business. At the Comfort Inn University Center in Fairfax, roughly 70 percent of bookings come through third-party Web sites.

“Over the last five years, there has been a huge growth,” said Brian Fogarty, front desk manager at the hotel. “It’s generally younger people who are looking around and trying to get the best deal.”

“No hotel that I know of, especially during these tough times, can afford to not be on those sites,” said Sta. Cruz, who is also general manager of a Hampton Inn in Woodbridge.

But not all travelers are convinced that low-priced mystery bookings are worthwhile.

Micaela Williamson, author of the travel book “Kid Trips Northern Virginia,” said she often peruses Web sites such as Expedia and Travelocity to compare prices. But when it’s time to book a room, she ends up going to the hotel’s Web site, where she knows exactly what she’s getting.

“Now that I have two children, I like the security of knowing where we’re going,” she said.

Abha Bhattarai covers local retail, hospitality and banking for The Washington Post. She has previously written for The New York Times, The Wall Street Journal, Reuters and the St. Petersburg (Fla.) Times.



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