The Taboo Business of Rooms by the Hour

From www.justluxe.com, by Nicolle Monico
The Taboo Business of Rooms by the Hour

Rent-by-the-hour hotels have gotten a bad rap over the years. Stereotypically they are used for unsavory activities, and tend to be in equally unpalatable locations. Yet the concept and business model isn’t so bad. In fact, it makes a lot of sense when you look at how many hotels suffer unbooked rooms that could be generating revenue. 

After traveling overnight to reach a destination, businessmen and women want a place to shower and freshen up before their first meeting of the day. Couples step out of their daily routines by cozying up in a room, relaxing at the spa and dining in the hotel restaurant before heading home to relieve the babysitter. And of course, even affluent guests have been known to engage in a little afternoon delight. These are all untapped, potential repeat customers.  

the ampersandPhoto Credit: The Ampersand Hotel

According to NBC, in 2011, Le Parker Méridien offered a Valentine’s Day package for a four-hour stay in one of their suites. When contacted, the property stated that they no longer offer the service. It’s clear that most, like Le Parker, like to keep quiet about hourly rates, even though they are available more often than you think.

“Luxury hotels, and the range of hotels on our site, aren’t renting by the hour. But what a lot of hotels are doing that they don’t necessarily advertise, is allowing people to come in and rent a room by the day for a few hours,” Getaroom.com co-founder Bob Diener told Maxim. “How they’re packaging it these days is by using deals that let you use the room, the gym, and the pool. But what many people don’t know is that looking for secret rates is a better way to get a lower room rate."

So how do you go about booking a day-use room without getting the side eye from a booking agent or an immediate “No?” There are a couple of ways. The first is working with sites like Getaroom.com. “We have 40,000 hotels participating with unpublished rates – they’re willing to give us better rates if we don’t publish the numbers online,” Diener told Maxim.

But one of the best websites out there for this amenity is DayUse.com. Started in 2010, the company is an international booking site promoting hourly rates by monetizing empty rooms during the day at lowered rates. The Paris-based startup initially only worked with 10 boutique hotels in its home city. Today they work with 2,000 properties in 14 countries.

DayUse.com does not require a credit card upfront, the booking is done via email. You pay upon arrival (no questions asked) and can cancel at any time, up to the last minute. You see where this is going? Discretion is the name of the game; they know some clients might indeed be looking for something a little more taboo than a midday nap. But hey, who are they to judge?

As the number of jetsetters rises, the demand for these hourly rates at upscale hotels are becoming more apparent. “Todays world is very different than it was 50 years ago. […] Yet, the hospitality industry is truly struggling to get up to speed,” said David Lebée, CEO of DayUse.com. “If you take disruptive startup models coming from the sharing economy like Airbnb and Home Away for example, you quickly come to realize that they have created new services that are taking more market share from the hotels. It is important for the hotel industry to quickly adapt to the new market demand to remain ahead of their game.”

A quick search on Lebée’s site shows that there are 17 four- and five-star hotels currently in New York (the only US state listed) participating in the partnership. In London, there is a significant jump with 82 high-end properties being listed, seven of which are five star, such as The Ampersand, La Suite West, Town Hall and Hilton London Bankside. "In London and New York, it's different. […] You'll see French businessmen coming to London for the day just to open a bank account,” Thibaud d'Agrèves, co-founder of DayUse.com told CNN. "They need a room just for chilling, a rest, and a quick nap. Then they take the train back to Paris." 

London’s number also might suggest that different locations might be less, shall we say, judgmental when it comes to day-use accommodations. Some may even be more eager than others to jump in on the trend. Lebée feels however that only large cities can really benefit from the offering, needing a population of at least one million to really be successful.

The whole concept really is a win-win situation for guests and the industry. Since its inception, DayUse.com has booked more than 320,000 hotel rooms. Essentially, high-end hotels could be generating more revenue by simply allowing guests to occupy these vacant rooms. Michael Benjamins, Senior Sales Manager at the Town Hall Hotel stated that in they year they started taking day bookings, they've brought in an extra £10,000 (USD $15,880) in revenue. That number is likely higher now.

Since not all hotels are listed on these booking engines, another way to secure an hourly rate is just to ask. Call the property directly, not the 1-800 number. If they have adequate vacancies, they may be willing to work with you on a rate, especially if they have it on record that you are loyal to the brand and visit frequently. If you are not a regular guest anywhere, head to an independently-owned hotel as they are more likely to agree to a day-use stay.

There is an evolving affluent market looking for hourly accommodations, which of course translates into an emerging revenue opportunity for hotels everywhere. But it will probably take some time before we’re finally able to jet off to a five-star hotel for the afternoon, without having to reserve it for a whole 24-hours. “We want to change the way people look and think of a hotel,” said Lebée. Let’s see just how long that takes. 

Continue reading at JustLuxe Feed