LAS VEGAS Following a trend among national hotel chains, two Las
Vegas resort companies and one independent hotel are making moves
to reclaim control of room inventory and pricing by guaranteeing
that the lowest room rates available can be found on the company
Web sites.
In March, Caesars Entertainment has announced a “Best Rate Plus
Guarantee” program that says, in essence, if a customer or a travel
agent finds a lower rate for one of the company’s resorts with any
third-party Internet provider, Caesars will match the lower rate
and discount it by 25 percent. Restrictions, of course, apply. The
lower competing rate must be found within 24 hours, and the request
for the discount makes a college application look simple, but
that’s not really the point. Nor is the fact that the commission
will be paid on the lower rate.
The point is that travel agents now have access to the best
rates available for commissionable sales, putting agents on equal
footing with Internet providers. “What it does is give the travel
agents the same advantage as some of the other third-party
providers,” said Steve Rosen, senior vice president of marketing
with Caesars Entertainment. “What we have done is said that we are
all going to start with the same base price. The travel agents can
feel comfortable that their customers are not going to come back
with a lower rate they found someplace else. It puts the travel
agent on the same playing field as the third-party providers.”
The guarantee applies to all Caesars Entertainment’s domestic
properties, Rosen said. Caesars operates eight resorts in Nevada,
three in New Jersey, five in Mississippi and one each in Indiana
and Louisiana.
Mandalay Bay Resorts is also guaranteeing that the lowest rates
available can be found on the various Web sites for each of the
company’s resorts, but company spokespersons were not forthcoming
with details. A room reservations clerk at Mandalay Bay had to ask
a supervisor about the guarantee and still had few details except
to say that the offer did not apply to rates available through
“major wholesalers.”
Hotel San Remo, a smaller, off-strip property, is also offering
to beat rates from other providers. Although a spokesperson said
the guarantee is not available to travel agents, the bigger picture
might matter more to agents in the long run. According to Richard
Copland, president of the American Society of Travel Agents, the
fact that the resort companies are taking control of inventory and
pricing brings smaller travel agencies back into the game.
“The hardest thing in the marketplace is when suppliers give
different people different deals,” he said. “What this is going to
do is it’s going to give the sellers of travel much more confidence
in selling the product. This way, if I put a lot of time and energy
putting together a package for 50 or 100 people, I don’t have to
worry they are going to come back at me and say they found the same
thing at a lower price someplace else.” Caesars’ Rosen said other
Las Vegas companies would more than likely make similar offers in
the near future.
“This is a ‘Me Too’ industry. If it makes good business sense,
you will start seeing more and more of this. It’s good for
everybody. It helps the suppliers and it really helps the travel
agent and the consumer,” he said.
It makes sense too that anything that undermines the power of
the Internet providers will help bring customers back to travel
agencies, Copland said.
“They [third-party providers] like to think they’ve got the
cheapest rates,” he said. “This will water down their ability to
cut out people who don’t have as much clout in the marketplace.
This gives the smaller operator a level playing field.”
Not everyone agrees that the move against the Internet providers
will have a big impact on the travel agent business. Tammy Lee,
vice president of corporate affairs with Mark Travel, said that
consumers who are cost-conscious aren’t calling travel agents
anyway. “The really good travel agents are providing customer
service and value the Internet can’t provide,” Lee said. “The
customers who call to book Las Vegas through a travel agent are
looking for that higher level of service, they aren’t looking for
price.”
She pointed out that few agents focus on selling Las Vegas
because room prices and commissions are already low, but Rosen says
that is changing.
The price point for Las Vegas rooms is rising as the quality of
the products offered goes up. Caesars is opening a new 949-room
luxury high-rise tower in 2005 and Wynn Las Vegas will open with an
inventory of 2,700 high-end rooms at about the same time. “It’s
going to be pretty interesting to see what happens in the next six
months to a year,” Rosen said.
Room rates in Las Vegas have been rising for some time and will
continue to do so as long as demand rises to match the increase in
inventory, Rosen said. With the resorts moving to take control of
inventory, agents have another tool to serve high-end clients.
