Thursday, June 9th, 2016, 9:25 am
Update: Award availability has significantly improved as of yesterday and has opened up on more than 50 dates that I’ve been tracking. That’s a great sign going forward from my favorite hotel in Israel, so hats off to the Waldorf team in Jerusalem.
Originally posted on 5/31:
Related post: The Dollars And Cents Behind A Hotel Award Stay; What The Park Hyatt Toronto Makes On An Award Stay
Point hotels in Israel are hard to come by.
Not long ago Starwood had 13 properties that were all bargains with Starpoints. I stayed in many of them on a month-long trek across the holy land in August of 2007, spending just a couple thousand Starpoints per night to stay in Jerusalem, Haifa, Eilat, Tiberias, and the Dead Sea. Now there’s just 1 left, the Sheraton Tel Aviv, and at 12K-16K points per night it’s not the bargain it once was. The W Tel Aviv-Jaffa was slated to open fall 2015 but that has been pushed back to November 2016. I’ve heard rumors of a Westin Tel Aviv, but nothing for Jerusalem.
Hyatt had a Jerusalem hotel but now has nothing.
Marriott has the Renaissance Tel Aviv Hotel and the Ritz-Carlton Herzliya.
IHG has a nice selection of hotels in Israel, though the Crowne Plaza Jerusalem is dated and isn’t in a good location for tourists.
Hilton has had several hotels in Jerusalem over the years that have come and gone. The David Citadel opened as the Hilton Jerusalem in 1998 but left Hilton in 2001.
The Waldorf Astoria Jerusalem opened in 2014 and is a gem, possibly the finest hotel in the whole country.
We stayed there last year and had a wonderful time. It costs 64K-80K points per night, but it’s well worth it. Citi gives 2 free nights there with the Citi Hilton Reserve card. The Reserve card even gives Gold status which earns you free breakfast, a real treat at the Waldorf. But those nights can officially only be used on weekends.
Hilton doesn’t have capacity controls on their standard award nights. Hotels set a base room type and if they are selling base rooms you can redeem points for that room. Hilton divides its hotels into 10 categories based on their average room rates. The Waldorf Astoria Jerusalem is a category 9 hotel. Category 9 hotels cost 50K points/night in low season and 80K points/night in high season.
However unlike other brands like Starwood, Hilton allows hotels to declare every date on the calendar as high season, so the Waldorf has every single date marked at the high season rate of 80K points/night. If you are a Hilton elite or cardholder you get the 5th night free on awards, so that drops the cost of a 5 night stay to 64K points/night. Hilton AMEX cardholders can also book a 4 night stay for 65K points/night.
If a hotel is sold out of base rooms then they don’t have to offer any standard point rooms. They sell other rooms at massive premiums to the standard rate.
Some hotels are notorious for playing dirty pool.
One of the worst offenders is the Andaz Maui which added a new type of base room after they opened called the “Garden View.” They typically don’t sell this room type directly on Hyatt.com and even on the rare occasion that they do, they have a 5 night minimum stay requirement. However I’ve found Garden view rooms for sale on other sites without a 5 night minimum and when I’ve emailed Hyatt about that, they just say they’ll contact the other booking website to remove the Garden view room. Well, isn’t that helpful…
The reason that some hotels abuse the no capacity controls on award nights is that hotels are typically privately owned and are managed by companies like Hilton, Hyatt, or Starwood in order to drum up more business. Those hotel management companies send loyal guests to the hotels and the hotels pay a royalty to the hotel management company. They also participate in loyalty programs that has a cost to the hotel, but is worthwhile due to having guests that actively seek out specific hotel brands.
When a guest uses points at a hotel the hotel management company typically reimburses the hotel with a small fraction of the daily rate. This is usually a big profit center for the hotel chain as Hilton might sell 80K points to a credit card company for $320 but they might only reimburse the hotel $50 for the night. The catch is that if a hotel is fully occupied (typically at least 90% or 95% full though it varies based on the hotel management contract) then the hotel management company will reimburse the hotel at the average room rate for that night.
Last Monday, DDF member yg99 noticed that he couldn’t find any award space at the Waldorf Astroria Jerusalem.
I took a look and he was right, there were zero standard rooms for sale from now through 2017, which meant no rooms were bookable for standard points or with Citi free nights. Everything was wiped out.
I reached out to a few contacts at the hotel Monday morning asking for a comment and didn’t hear back from them by the next morning, so on Tuesday I emailed Guy Klaiman, the general manager of the Waldorf Astoria Jerusalem, about the disappearance of standard rooms.
He quickly replied,
“We were configuring our reservation site in the past days, this is the reason some dates are closed. It would change in the coming days.
And indeed, right about then I noticed along with DDF members that superior rooms start showing up once again at the standard points rate.
However eagle-eyed DDF’ers now noted that every Thursday and Friday night were still showing no superior rooms available. So I emailed them again asking about the sudden disappearance of weekend award availability.
This time I heard from Katy Peer, a reservations manager that,
“Superior rooms are open for Midweek (Sunday-Wednesday). CLOSED on High season.”
Well we’ve always known that the Waldorf never released any superior rooms on holidays like Sukkos, but blocking that award space on weekends was something new, so I pressed once again, asking if this was a change in policy going forward to which she responded,
“Some weekends are open, depends of hotel occupancy.”
Of course, hotels shouldn’t be blocking base rooms due to occupancy. They should offer them until they’re sold out.
I’ll leave out the funny but mistakenly received “reply all” email at this point, but in the meantime superior rooms began to reappear for weekends during off-peak months. However many weekend nights are still blocked from now through July and from October through next April. And all nights are blocked around Sukkos, around the “Yeshiva weeks” in late January, and for next Pesach. Aside from Sukkos, all of those dates had standard rooms for sale before last week’s changes.
I emailed back the GM for further clarification and he wrote,
“The Hilton Honor standard room reward program is intended to improve our guests satisfaction and available according to the hotels availability.”
That’s not much of an answer for what’s been going on. What are the odds that all of those weekends sold out of superior rooms overnight?
The even odder part is that if a hotel is nearly full it gets fully compensated for award stays, so why is there even a need to block award stays during periods of high occupancy? And rooms sold during low occupancy generate some revenue when there otherwise wouldn’t have been any. It seems like a good thing to me, though it’s possible that occupancy isn’t full enough to trigger the full payment for the room from Hilton and that’s the reason for what’s going on here.
So I asked the GM,
“Doesn’t Hilton reimburse the hotel at ADR for award stays when occupancy is near full? Why is there a need to block high occupancy dates when those are the dates that Hilton reimburse ADR?”
ADR is the hotel’s average daily rate.
To which he responded,
“I appreciate your knowledge , however availability is according to the hotels standard rooms availability.”
That’s also not an answer.
Loyalty is a 2 way street. If the rules of a loyalty program are that a hotel can’t have capacity controls, then the bulk disappearance of those rooms from the calendar seems to run against that principle. The space ought to be tied to the actual inventory of superior rooms as is intended, rather than just left to the whims of the hotel.
I emailed this article to the GM last week asking for comment, but after hearing nothing I suppose that’s all we’re going to hear about this.
Clearly, Israel is a tough market for chain hotels and the temptation to de-flag is real, though it comes at a financial cost and loss of name brand recognition. The Waldorf Astoria Jerusalem offers a product and service that is head and shoulders above their competition and I’d love nothing more than for them to stick with their flag for decades to come, while maintaining a high level of performance. I’m just hoping that the shenanigans are left by the wayside and that this isn’t indicative of their future direction.