Subject: Re: Above market hotel room rates

From: Lou Berger <[email-masked]>
Date: Wed, 24 Mar 2010 07:53:33 -0700

Phil,
	I've been booking lower non-ietf rates at most IETFs for quite some
time now.  I don't remember when I started, but it certainly was after
AMS took over.  If the problem is really as you suggest, that rates go
down from the time of contract signing to when the meeting is actually
held, then this can be easily addressed in the contract.  If one had
checked rates at the time this hotel was announced, you would have found
like I did that the adjacent weeks had much lower rates than this week.
 This was the context for my question to Ray in Hiroshima. Clearly those
who are negotiating on our behalf could be doing a better job on
pricing.  If they can't get obtain better prices, what's the point of
having a IETF/group rate?  We should all just book individually.

I don't think anyone, including myself, need someone to "cry to", but I
do want an IAD/secretariat that works to the benefit of the IETF.  I
can't speak for anyone but myself, I come to the IETF to work.  I really
don't come to the IETF for the nearby attractions or the right brownies.
 In order to do our work, I think we need a reasonable and safe meeting
environment (which includes no construction, a past problem that the
secretariat thankfully ensures no longer occurs), a meeting location
that is easily accessible, and costs that are contained (because if
they're not, my and many others ability to attend will be limited.)

Perhaps I'm misinformed or being unreasonable, but I expect that it is
the IAD/secretariat's job to deliver these.

Lou

On 3/23/2010 8:19 PM, [email-masked] wrote:
> Well I am not in the secretariat but I expect it is something along the lines of: 
> 
> The ietf reserves the hotel a year or more in advance and signs a contract for a block or rooms at rate X which is a discount on what the hotel expects room rates to be in the future.  Then a year goes by and the economy dictates what the actual room rates are at the time of the conference.  Usually its a lot more.  Occasionally its not.  Anyone making reservations should always ask what rate is available at the time.  Of the standard rate is less then book that.  People need to be responsible for themselves and not cry to the secretariat to manage their lives for them.  I paid for my own way when I went to meetings and you can be sure I asked when making reservations.
> 
> Phil
> ------Original Message------
> From: Lou Berger
> Sender: [email-masked]
> To: Samuel Weiler
> Cc: [email-masked]
> Subject: Re: Above market hotel room rates
> Sent: Mar 23, 2010 7:36 PM
> 
> I asked Ray about this problem in Hiroshima, his response was something
> along the lines of "conference rates are different and more complicated
> from regular hotel rates".  I have to say, I really think the community
> deserves a detailed response on this topic from the secretariat...
> 
> Lou
> 
> On 3/23/2010 6:44 PM, Samuel Weiler wrote:
>> Once again, we appear to be meeting in a hotel that's offering lower rates to 
>> the general public than they're offering to us.
>>
>> As of right now, the "Best Available Rate" at the Anaheim Hilton for tonight, 
>> 23 March 2010, is $119.  The senior rate is $113.  That's from hilton.com. 
>> With a 2 day cancellation policy.
>>
>> The same rate is also available for a three night stay, leaving on Friday.
>>
>> -- Sam
>> _______________________________________________
>> Ietf mailing list
>> [email-masked]
>> https://www.ietf.org/mailman/listinfo/ietf
>>
>>
>>
> _______________________________________________
> Ietf mailing list
> [email-masked]
> https://www.ietf.org/mailman/listinfo/ietf
> 
> 
> Sent from my Verizon Wireless BlackBerry

---

From: joel jaeggli <[email-masked]>
Date: Wed, 24 Mar 2010 08:08:13 -0700

It's actually pretty straight forward. hotels expect to make a certain 
amount on a conference of a given size. you can either pay that in 
meeting room rental, f&b or room rate. if the room rate goes down the 
attendance fee goes up.

Also the multivenue hilton contract was negotiated back in the neustar 
days so it's not clear that ams was even involved.

joel

---

From: Tony Hansen <[email-masked]>
Date: Wed, 24 Mar 2010 11:23:41 -0400

Another factor is that the going IETF room rate may include other items 
as part of the package. For example, in Hiroshima breakfast was included 
in the IETF room rate, but not the "off the shelf" rate. Other amenities 
will vary.

	Tony Hansen

On 3/24/2010 11:08 AM, joel jaeggli wrote:
>>> The ietf reserves the hotel a year or more in advance and signs a
>>> contract for a block or rooms at rate X which is a discount on what
>>> the hotel expects room rates to be in the future. Then a year goes by
>>> and the economy dictates what the actual room rates are at the time
>>> of the conference. Usually its a lot more. Occasionally its not.
>>> Anyone making reservations should always ask what rate is available
>>> at the time. Of the standard rate is less then book that. People need
>>> to be responsible for themselves and not cry to the secretariat to
>>> manage their lives for them. I paid for my own way when I went to
>>> meetings and you can be sure I asked when making reservations.
>>>
>>> Phil

---

From: Andrew Sullivan <[email-masked]>
Date: Wed, 24 Mar 2010 11:36:12 -0400

> held, then this can be easily addressed in the contract.  If one had

When you book a hotel as part of a large group like this, you are
effectively participating in a futures market.  What you're asking for
is not to participate in a futures market, but for Hilton (or whatever
hotel) to agree to take all the risks and for you to get all the
benefit.  I think it would be insane for a hotel manager to agree to
that.

The walk-up rate is irrelevant to this discussion.  Hotel staff are
under enormous pressure when the hotel isn't booked completely to get
the rooms full, even if the room is rented for the night at an
enormous discount from average revenue, because an empty room means 0
revenue.  (There is, of course, a minimum, but it's really low.  When
I was an undergraduate, rather than working in a bookstore I worked in
a hotel.  I once rented a room for 1/10th average revenue, thereby
making our minimum occupancy for the day and earning great praise from
my boss who did not get chewed out about vacancy the next day.  This
was in February in Ottawa.  Nobody wanted to be there.)  By the same
token, of course, as the hotel fills up the rate goes up, because the
chances that someone will get desperate and need the room at whatever
price goes up.  The rate you get, therefore, when booking as part of a
group well in advance, includes a certain amount of money that amounts
to an insurance premium: you pay more in order to get the stable rate,
betting in effect that the hotel will fill up and you'd have to pay
rack rate to get a room.  If you don't want to take that bet, don't:
wait until near the meeting time and see whether you can do better.
I'm not much of a betting man myself, so I prefer the predictable
though slightly more expensive rate.  (None of this is to disagree
with the others who've pointed out how simplistic the walk-up
rate:conference rate comparison is anyway.)

Best,

A

-- 
Andrew Sullivan
[email-masked]
Shinkuro, Inc.

---

From: "Spencer Dawkins" <[email-masked]>
Date: Wed, 24 Mar 2010 10:53:05 -0500

I believe this is more consistently true outside the United States (so it 
will be true for most of our known locations for the next few years).

Spencer

> Another factor is that the going IETF room rate may include other items as 
> part of the package. For example, in Hiroshima breakfast was included in 
> the IETF room rate, but not the "off the shelf" rate. Other amenities will 
> vary.
>
> Tony Hansen
>

---

From: Melinda Shore <[email-masked]>
Date: Wed, 24 Mar 2010 07:54:28 -0800

> meeting room rental, f&b or room rate. if the room rate goes down the 

It's been awhile since I was on a program committee but as I recall
there's also some interaction between meeting room costs and
refreshment costs.

Melinda

---

From: todd glassey <[email-masked]>
Date: Wed, 24 Mar 2010 09:08:23 -0700

> benefit.  I think it would be insane for a hotel manager to agree to

yes but they do for their larger client's who regularly register for
these events. Especially in today's world where travel is much more
expensive for people to cover.

> price goes up.  

Supply and demand is the key here.

> The rate you get, therefore, when booking as part of a
> rack rate to get a room.  

Having run the bookings for the ABA's ISC for several years this is only
true of parties who have no clout. The bolt-on expenses cover the
operations and profit at the venues usually.

If the client is well respected we generally got the better rates or we
wouldnt use those hotels next year. I cant tell you what I paid the
Fairmont for meeting rooms - it would make you scream with the extortion
the IETF is subjected to, but hey I offered to help with these issues.

> If you don't want to take that bet, don't:

In Beijing this wont be a problem IMHO...

---

From: Samuel Weiler <[email-masked]>
Date: Wed, 24 Mar 2010 12:17:39 -0400 (EDT)

> benefit.  I think it would be insane for a hotel manager to agree to

I very much like this analysis, and I think it's reasonably accurate 
as far as the group booking goes.

But individual bookings are more like participating in an options 
market: up until N hours before check-in (the cancellation deadline), 
you're buying zero-cost options on hotel room prices[1].  Only at N 
hours do those convert to something resembling futures.  Even then, 
there's still typically an easy out.  And hotel managers agree to that 
as a matter of course all of the time.  It's so ingrained in the 
marketplace that even the individual room rates as part of the group 
booking behave this way.

> The rate you get, therefore, when booking as part of a group well in 
> advance, includes a certain amount of money that amounts to an 
> insurance premium: you pay more in order to get the stable rate, 

With zero-cost options available, that seems like a needlessly risky 
strategy.

-- Sam

[1] There is some overhead in managing those options and making sure 
they don't convert to futures when you're not watching.  Which could 
be expressed as a cost.

---

From: Paul Hoffman <[email-masked]>
Date: Wed, 24 Mar 2010 09:24:03 -0700

There are only a few of us on this list who have put on meetings where we had to sign contracts with hotels. Even in that small group, few if any have put on meetings with 1000 attendees. As someone in the former group (interoperability events with 20-100 people), in Hiltons, I can state without hesitation that every negotiation with every hotel is quite different. Second-guessing after a finished negotiation about what would have been better assumes that you know what the hotel offered; it is likely that no one other than the IAOC and the hotel knows that.

--Paul Hoffman, Director
--VPN Consortium

---

From: Lou Berger <[email-masked]>
Date: Wed, 24 Mar 2010 10:25:41 -0700

FWIW My rate in Hiroshima was both lower than the IETF rate and included
breakfast.  I asked at check in if the IETF rate included anything not
included in my cheaper rate, and was told no by the hotel staff.

Lou

---

From: Dave Cridland <[email-masked]>
Date: Wed, 24 Mar 2010 17:33:08 +0000

> included in my cheaper rate, and was told no by the hotel staff.

Maybe it includes a warm fuzzy feeling that you're helping the IETF  
keep registration costs low.

Maybe if you get an official room, you'll see that as a line item on  
the bill at checkout.

Dave.
-- 
Dave Cridland - mailto:[email-masked] - xmpp:[email-masked]
  - acap://acap.dave.cridland.net/byowner/user/dwd/bookmarks/
  - http://dave.cridland.net/
Infotrope Polymer - ACAP, IMAP, ESMTP, and Lemonade

---

From: Lou Berger <[email-masked]>
Date: Wed, 24 Mar 2010 13:00:07 -0700

I have no issue if the hotel rates subsidizes the meeting.  I've been
told that this is not the case, even though it is what I/many expect.  I
guess I should just accept that there is one and that there is no
transparency on this point.

Lou

---

From: "Adrian Farrel" <[email-masked]>
Date: Wed, 24 Mar 2010 21:43:13 -0000

Louis Berger sed:

> I have no issue if the hotel rates subsidizes the meeting.

+1 within reason
In fact, I am much more likely to accept high room rates if I know they 
subsisdise my favorite NFP.

> I've been
> told that this is not the case, even though it is what I/many expect.

I can't comment, but I hear different stories.

> I

I don't see either why there should be no transparency or why you should 
accept it.

Adrian

---

From: [email-masked]
Date: Wed, 24 Mar 2010 03:19:48 +0000

Phil
------Original Message------
From: Lou Berger
Sender: [email-masked]
To: Samuel Weiler
Cc: [email-masked]
Subject: Re: Above market hotel room rates
Sent: Mar 23, 2010 7:36 PM

Lou

---

From: Samuel Weiler <[email-masked]>
Date: Wed, 24 Mar 2010 20:58:56 -0400 (EDT)

> transparency on this point.

There is some transparency.  And there is some subsidy.

The IAOC publishes the meeting financial reports:
http://iaoc.ietf.org/mfstatement_detail.html

You can also find recent ones in your meeting materials packet: 
http://www.ietf.org/meeting/77/meeting-packet.pdf

In these reports, one line item under "revenue" is "Hotel Commission".
That's the explicit subsidy.

There may also be implicit subsidy (e.g. lower room costs).  That's a 
little hard to discern the exact value of, but its existance is 
obvious from the expense line items, showing a $0 cost for meeting 
rooms in San Francisco but significant meeting room costs in Hiroshima 
and Stockholm.  On the other hand, SF had higher AV and food costs 
than Hiroshima and Stockholm.  Even with that, the sum of 
rooms+food+AV in SF was lower than the sums from Hiroshima and 
Stockholm.

I understand it's a tough balancing act for the IAD & IAOC. 
Hopefully having more data about hotel rates, including knowing that 
the community is aware of changes in publicly-available rates, will 
help them in future negotiations.

-- Sam

---

From: Phillip Hallam-Baker <[email-masked]>
Date: Wed, 24 Mar 2010 22:53:23 -0400

There is usually a spread, it almost always favors the IETF bookers.

This year the hotels offered with an RSA booking were the same as last
year with slightly lower prices. Most people book early because they
usually fill up quickly for RSA. When I booked my flight I was offered
the Hyatt Union Square, usually $250/night during RSA week for
$110/night.

Sure, it does happen, but my experience has been that the IETF hotel
is usually overbooked and there are no rooms left to make a
comparison.

---

From: Samuel Weiler <[email-masked]>
Date: Thu, 25 Mar 2010 21:46:21 -0400 (EDT)

On Wed, 24 Mar 2010, Tony Hansen wrote:

> Another factor is that the going IETF room rate may include other 
> items as part of the package. For example, in Hiroshima breakfast 
> was included in the IETF room rate, but not the "off the shelf" 
> rate. Other amenities will vary.

Indeed.  There are also variations in the publicly available rates: 
for $20 more than the rate I posted, $55 less than our group rate, you 
could have an equivalent room, a quite extensive breakfast buffet for 
two, a bottle of sparkling wine, and late checkout (the "romance 
package" -- what every IETFer needs).  There were other options with 
net, Disney ticket discounts, restaurant credits, and the like.  And 
there are rates via third parties.  I figured the "Best Available" 
rate as shown on the hotel's web site and as quoted by the desk to 
walk-up guests was a simple and fair starting point.

As new data, the Anaheim Hilton raised its rate this week to $209, 
perhaps as a result of having this discrepancy pointed out.  But if 
you're willing to stay over the weekend, you can still get rooms for 
$139 (check in tonight, leave Tuesday).  And they're advertising $99 
rates next week.  (or $94 for seniors, $119 for the romance package)

-- Sam

---

From: Stephane Bortzmeyer <[email-masked]>
Date: Fri, 26 Mar 2010 16:50:24 +0100

On Wed, Mar 24, 2010 at 11:36:12AM -0400,
 Andrew Sullivan <[email-masked]> wrote 
 a message of 48 lines which said:

> effectively participating in a futures market.

Fascinating discussion. I learned a lot, including the fact that
IETFers are expert in other things than network protocols :-)

---

From: joel jaeggli <[email-masked]>
Date: Fri, 26 Mar 2010 09:01:30 -0700

On 3/26/2010 8:50 AM, Stephane Bortzmeyer wrote:
>   Andrew Sullivan<[email-masked]>  wrote

Or you might conclude that they are hobbyists in a number of areas 
including network protocols.