The Hotel Booking Negotiation Exercise
Summary of the Assignment. During the next week and a half I would like you to actually negotiate for a room in a moderately-priced hotel in Atlanta based on facts I give you below. Your goal is to negotiate until you are satisfied you have gotten the wisest deal you can from a suitable hotel. Later I ask you to compare notes with a classmate, but please do not discuss the exercise until you have actually negotiated with hotel(s). Please exchange phone numbers with a classmate before you leave class tonight. If you miss the class I distributed this assignment in, please call a classmate or do the assignment on your own. Details about the assignment appear below.
The assignment is due in class on June 1.
Facts. You are new manager with a job in a medium-sized corporation. You need to book a room in a hotel in Atlanta for a trip you are planning to take. The trip will occur the week of July 10. You need to stay over three nights. You must be in Atlanta all day Monday, July 10, but you have some flexibility on your arrival and departure date. The meeting cannot be rescheduled. You can't leave for Atlanta until the Friday before your Monday meeting and you must be back home by the Thursday after your meeting. You are visiting to have a one day meeting with clients and to handle some family business with your sister and brother-in-law in Athens (a town roughly one hour from Atlanta). You will need to visit them on two separate days. Because of privacy and space concerns, staying with them is not an option. Also, because they have a new baby, they cannot pick you up or meet you outside their house. However, they will be able to leave you a spare car at the airport, so you will not need ground transportation. For the purposes of this exercise, assume you can easily book an inexpensive flight to Atlanta for any trip you make.
Your boss has asked you to go and will pay for the room for all three nights. You've told your boss you would like to visit family during the trip and she has agreed to let you stay over for this purpose. However, your boss has given you strict instructions to keep your travel expenses down as low as possible and still meet the other requirements he has. First, of course, you must make the Monday meeting. The client meeting will be 9 a.m. sharp Monday in an office at the Peachtree Center on the corner of Ivy and International Streets in the center of Atlanta's business district. Therefore, he wants you to be in a hotel that will make it easy for you to get to the meeting on time, since parking, traffic and air traffic can be terrible on a Monday morning in Atlanta Therefore, he asks that you book a room not more than a 30 minute drive from Peachtree Center. Since you may need to drive your clients to another meeting outside the city on short notice, you must drive or walk to your meeting. Thus, you can't use mass transportation. (If you can get a hotel very close to the meeting at little extra cost, so much the better.) Second, he asks that you not to stay in a budget one-star hotel, (such as Motel 6, and most Travelodges, Howard Johnson's and Days Inns), especially on the day of the meeting. He request this because your clients may call you at the hotel or ask you where you stayed and may be put off if they learn you are staying in such a cheap place. For these reasons, he strongly recommends that you stay in at least a two-star hotel according to the Mobil Travel Guide. (If you can establish that it's at least as good as a two star hotel using some other recognized rating guide, that's fine too.) He adds that you are welcome to stay in a better hotel if you can find a way to do it at an affordable overall cost. You must stay in an established, commercial hotel; you may not stay in a bed & breakfast, hostel, or private home.
You may make up additional facts when necessary for the sake of realism. For example, if asked you may raise with the hotel something hypothetical that you could reasonably make a reality before the date of the trip (e.g. affiliation in a frequent flyer club). However, do not create other facts that would give you an advantage. (For example, don't claim you have 100,000 frequent flyer miles.)
Your Priorities.To summarize, these are your priorities: (1) travel plans that allow you to be within 30 minutes of your Monday morning meeting, (2) at as low an overall cost as possible during your three nights and that allow you to stay over three nights, visit your family, and return by the following Thursday, (3) at a presentable commercial hotel of two stars or better. (4) If you can get other amenities and benefits, so much the better, but these are least important.
Doing the Assignment: Please prepare as you wish and then negotiate for the best deal you can by, among other things, actually contacting one or more hotels and negotiating actual terms. What difference does research and creativity make? Out of respect to the hotels and other travelers (and to avoid inadvertently being charged for a room), please do not actually make a reservation, but do take the interaction as far as you can short of actually booking a room. See what it takes to negotiate the wisest deal. Notice that the assignment is asking you to negotiate and not just shop around. That is, don't simply call a place and ask what they charge for a room and then hang up- see if you can get a better offer there. How many hotels should you contact? It's up to you. (While it is not a requirement, I do encourage you, if at all possible, to communicate with two comparable hotels that are within a couple of blocks of each other.) While Internet research is fine, you may not simply book a room at a given hotel via Internet; you must try to negotiate with a real person at that hotel.
Once you have spoken to one or more hotels and gotten what you believe is the wisest possible deal, please discuss your work with a classmate before next class. Who did better? Why? How? Take the best ideas you learn from the classmate and try them yourself. (If you genuinely feel there isn't much room for improvement using these ideas, discuss other ideas you both might try and then try them.) Then create a one to one and a half page memo that answers the questions on the attached form. (I've also attached a sample memo for your reference.) Make two copies, and submit one copy on the due date to me and give one copy to your classmate. Also, be prepared to discuss your work in class. The written assignment is worth 15% of your grade for the course. Your grade depends on the quality of your effort and assessment, and the quality of your results.
Out of consideration for the hotels you contact, please do one of the following: try to limit the length of a call to four minutes. The four minute suggestion does not mean you need to rush breathlessly through the conversation, nor does it mean you should stop at the first or second offer someone quotes you; just be considerate. If you feel you need more time, simply mention this to the person you are speaking with. You may find it helpful to jot down in advance things you would like to ask and take notes while you talk so you can make the most of the time.
For your reference, please refer to information about hotels in the Reading Packet and in the additional Mobil guide handout. Please ignore Mobil information about other cities which may appear in your reading packet.
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(Sample Hotel Booking Negotiation Memo)
To: Professor Freeman
From:
Date:
Email:
Re: Hotel Booking Negotiation Exercise:
I. Summary of Results
Where and When I Originally Decided I Would Stay: (Here note which hotel you decided you would stay at after your negotiations and before you spoke with your classmate. Include the dates you would stay there, the hotel's approximate distance (miles and minutes) to Peachtree Center, and the phone number. If available, note what price class or rating the hotel has. What if you initially decided to stay at Hotel A and then found a better deal at Hotel B after you talked things over with your classmate? Then discuss the first deal with Hotel A here and discuss the better deal below beginning with the section on "Insights from My Discussions with My Classmate".)
Opening Offer That Hotel Quoted Me: (Here give the rates, terms and total cost they offered initially.)
Rate and Terms I Ended Up With: (Here include all terms, room type, restrictions, special features and terms, add-ons, prices, etc. and total cost. You may list these terms, adding explanations where necessary)
II. Preparation and Approach
My Interests (list here the top four or five specific interests you know from the assignment that you have. For example, one interest is "low overall cost." You don't have to explain your answers.)
Hotel's Interests (list here three or four specific interests a hotel might have. For example, "maximize occupancy rates" You don't have to explain your answers.)
Factual Research (Describe here the specific research you did before you spoke to a hotel.)
Options (list here at least six different things you can suggest to the hotel representative that might allow you to satisfy at least one of your interests. (E.g., " AAA discount") You don't have to explain your answers.)
Best Alternative to Negotiated Agreement with this Hotel (Name the hotel, its address, number of stars, rate and terms.)
Hotels I Actually Called (List each one. You don't have to explain your answer.)
Approach. (Describe what you did during the negotiation with the hotel you chose to stay at. Note any useful questions or ideas you or the hotel actually raised.)
Classmate's Name :
Insights From My Discussions with My Classmate: (i.e., did you learn anything valuable from your classmate? Did you develop any new ideas together that you hadn't considered before? What if any ideas did you actually try out in your follow-up work? What happened?)
Where and When I Decided Ultimately I Would Stay and on What Terms: (If you got a better deal anywhere after you talked things over with your classmate, then here tell me the details. If you decided not to change the deal you liked originally, simply note here that you decided to stay put without any changes.)
III. Assessment
Three Reasons Why the Deal I've Chosen is Demonstrably a Wise Deal: (Be specific. What standards you are using? Number your reasons (e.g. 1., 2., and 3.).
Name of the Hotel Representative I Worked With: Here give the name of the person you negotiated with at the hotel you finally decided to stay at. (E.g. Bob Mandela.) If you did not get the name, write "Don't know."
What surprised me most about this exercise
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(Sample Hotel Booking Negotiation Memo)
To: Professor Freeman
From: Joseph Krementz
Date: June 1, 2000
email: cap
Re: Hotel Booking Negotiation Assignment:
I. Summary of Results
Where and When I Originally Decided I Would Stay: Hotel Windy, 100 Splendor Avenue, Atlanta, nights of Sunday, July 9 through Tuesday, July 12; 1-404-555-1234; 1 mile north of Peachtree Center (about 15 minutes at rush hour); two stars in Mobil Travel Guide.
Opening Offer That Hotel Quoted Me: $150 (plus taxes) per night for a king sized bed. (Total cost: $450 plus taxes).
Rate and Terms I Ended Up With: $140 (plus taxes) per night for two double beds on a low floor with continental breakfast. (Total cost: $420 plus taxes.)
II. Process-How I Got These Terms
My Interests:
Low overall cost
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Hotel's Interests:
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Factual Research
Before I contacted a hotel, I did the following things... ### was particularly important, because it let me.....
Options
AAA discount
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Best Alternative to Negotiated Agreement with this Hotel: $160 (plus taxes) per night for a king sized bed at the Hotel Young, 1200 Martin Luther King, Jr. Avenue, nights of Monday, July 10 through Wednesday, July 12; 10 miles southeast of Peachtree Center (about 20 minutes at rush hour); 1-404-555-9876. Moderately priced class hotel according to Consumer Reports. (Total: $480 plus taxes.)
Hotels I Actually Called:
Peachpie Hotel, Atlanta
Carter Hotel, Youinsdf, GA
Wesley Hotel, Paosdfin, GA
Hotel Dixie, Atlanta
Approach.When I contacted the Peachpie hotel, I spoke first with the reservation agent at the hotel's 800 number. After she quoted me the opening rate, I asked her if....she said..... I then suggested..... She asked me.....I mentioned that I knew that....Finally, she offered me.... I then.....
Classmate's Name:Conrad Hilton IV
Insights From My Discussions with My Classmate: I discovered that I might be able to save more if I did X and asked for Y; I also realized that the W hotel offered better accommodations than V hotel offered at the same rate. We also shared some ideas and thought it might be useful to ask both hotels if they would consider Z. I contacted my hotel and tried these ideas. At first they said.... but then they said.....
Where and When I Decided Ultimately I Would Stay and on What Terms: "Hotel Dixie, 150 Splendor Avenue, Atlanta, nights of Sunday, July 9 through Tuesday July 11; 1-404-555-1234; 1 mile north of the Peachtree Center (about 10 minutes at rush hour); two stars in Mobil Travel Guide. $120 (plus taxes) per night for a king sized bed plus breakfast and mileage credit. (Total cost: $360 plus taxes)." [or] "No change."
Three Reasons Why the Deal I've Chosen is Demonstrably a Wise Deal: (e.g. 1...., 2...., and 3....).
Name of the Hotel Representative I Worked With: "Bob Mandela" or "Don't know."
What surprised me most about this exercise: I was most surprised that...