Recession Rate: A Dollar a Night

A Philadelphia hotel hopes radical discounts will lead to higher occupancy.

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Find a penny, pick it up. All day long you’ll have good luck. And for a mere 99 cents more, all night long you can stay at the Alexander Inn in Philadelphia, which recently launched its “Guest Stimulus Plan” to encourage visitors to get out there and contribute to the economy – even if it’s only one dollar at a time.

Five of the boutique hotel’s normally over-$110 rooms are up for grabs for a single dollar in the promotion, which will end in June. The Greater Philadelphia Hotel Association has called the move “courageous,” and the Greater Philadelphia Tourism Marketing Corp. is on board.

With the tough times ahead for the travel and tourism industry, the innovation is more than welcome. Historic hotels are closing down left and right while Dallas is even converting one vacant downtown ex-hotel into rental housing.

The decline in U.S. hotel occupancy has been predicted since last year, when PKF Hospitality Research suggested that over the next two years, vacancy signs would be well lit. A more recent report, released two weeks ago by the same firm, points out that the decline has been even more severe than expected. Quarter-over-quarter gains are not anticipated until 2011 at the earliest.

So, after hearing such dismal predictions at the Greater Philadelphia Hotel Association’s February meeting, Mel Heifetz, owner of the Alexander Inn, and John Cochie, the innkeeper, inaugurated their Guest Stimulus Plan. “It’s not a government bailout program,” explains Cochie. It’s “people helping people,” which he insists is “the way we are actually going to get out of this economic mess. Their guests may only throw down one bill for a night at the inn, but the hope is that they will open their wallets for the neighborhood attractions, restaurants and shops.

It’s been quite a successful venture so far. With reservations confirmed one month in advance, the five one-dollar rooms sell out in under four minutes every morning. Visits to the hotel’s website are up an average of 355% and call volumes have jumped 380%.

And with such a dim outlook on the future of the hospitality industry, apparently the Alexander Inn isn’t the only one to catch on to the frugal ways of the recession traveler. recently launched a “World for $1“ promo that offers a room in any of their 15,000 associated hotels for $1 a night. But complaints poured in when the promo was only valid for an unannounced 15-minute window.

Harris Rosen of the Rosen College of Hospitality Management of the University of Central Florida told Cochie he was “either a lunatic or a brilliant marketer.” Rosen is now beta testing the one-dollar-a-night plan at one of his hotels in Orlando. And from San Francisco to Daytona Beach, other hotels are following Alexander Inn’s lead, Cochie says.

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Tags: philadelphiadallas

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