When the price is right there's little pillow talk
Sydney Morning Herald
Thursday August 27, 2009
IN 20 years working in hospitality and hotels, Gary Berman saw countless potential guests turned away because they were unhappy with rigid rates.But vacant rooms made no sense to him; he considered them lost profit that could never be recovered. To make matters worse, he still had to pay fixed costs such as to reception staff and housekeepers, who were there regardless of the guest numbers.Sick of seeing business walk out the door, Berman launched an online haggling service that lets customers bid on accommodation."It's better to get 80 per cent of something than 100 per cent of nothing," the Central Coast businessman says.The website, ubid4rooms.com, may look like other accommodation websites but customers name their price rather than the host. You also know what accommodation you are bidding on, unlike some auction websites that offer mystery holidays.Bidders make their offers directly to hotels. Multiple offers can be made at the same time and a secret result is delivered within three hours. Berman takes a typical 10 per cent commission on bookings.More than 700 hotels, apartments, guesthouses and bed and breakfasts from Australia and New Zealand are now listed on the site, including the likes of The Grace Hotel in Sydney and Palazzo Versace on the Gold Coast."The hotels have a lot of issues with diluting rates but this is not a published rate; it's one-off and confidential and it doesn't devalue the rate in any way," Berman says.Users typically save about one-fifth off already-reduced rates. Selling the idea proved difficult at first, Berman says, but acceptance of the concept is growing and sales are increasing.He also ran a carefully staged plan and strategy, taking about 18 months to get the details right before launching the website a year ago."I went to the properties who would use it well," he says. "I was going more for quality than quantity and I wanted hotels that would answer the bids and accept the bids in the right amount of time rather than just having hotels who are just there for the sake of it."Berman has since doubled the booking window from 14 to 28 days and launched an option to bid on several rooms at the same time.He saw a website as the ideal tool for travellers who would not normally think to ask for a better price; a service that took the embarrassment factor out of haggling and turned it into a game.The idea also suited hotels because they could control the discounts, something reception staff often did not have the authority or will to do."A lot of people aren't happy negotiating in person or on the phone and a lot of the time the hotels can't do it anyway," he says.
© 2009 Sydney Morning Herald
