Why Did Park Slope’s Hotel Le Bleu Charge $999 for a Room During Irene?

08/31/2011 10:34 AM |

Just a big misunderstading.
  • Just a big misunderstading.

Well, it turns out Hotel Le Bleu is just French for “The Blue Hotel,” not “that morally bankrupt bluish hotel on Fourth Avenue…” After someone from Hotel Le Bleu left us a comment claiming that they did not actually charge $999 for a single night during Tropical Storm Irene and the whole thing was a huge mistake, we contacted them to find out what exactly happened.

I spoke on the phone with Dev Dugal, who is vice president of Marketing and Information Technology at Globiwest Hospitality, the company that manages the Hotel Le Bleu. He explained that the process for allocation of rooms is completely separate from rates. Rates can be raised in seconds, in what he called “real time.” Like other hotels, Le Bleu works with travel websites like Expedia to post vacancies. In this case, Expedia did list a rate of $999. However, this happened, according to Dugal, because on Friday night, Le Bleu filled to capacity. They sent an email to Expedia telling them not to list vacancies but this email was never returned.

Dugal says possible power outages at the hotel or Expedia’s weekend services, which are automated, led to this lack of an email response. Therefore, Expedia listed open rooms, when there were none. Le Bleu didn’t want anyone to try to book rooms so they did what Dugal now thinks “might not have been the best thing to do.” They raised the rate to $999, thus hoping an astronomical rate would discourage people from showing up.

One person did show up to book at the $999 rate, saying that they did so as a precaution against the approaching hurricane. They got the room, but according to Dugal, they will be fully refunded the difference between the $999 rate and the normal rate, which is $269. He says rates have never risen above $399, and that was for New Years.

He also said only four employees were at the hotel over the weekend. “The Daily News could have spoken to anyone, a desk manager or a housekeeper. I don’t know who the editor to spoke to. Anytime you call our hotel, everyone gives a name.”

One Comment

  • What a sad excuse to hide your own failures. Why not close your rates (and thus your availability) via your channel manager? They would make a batter case for themselves by admiting this is outrageous. They do not only harm their own image, but this reflects badly on the entire industry. Just another example of the short-term focus of the industry. This is most definitely NOT a good example of revenue management practice.