HOTELS

Link This | Email this | Blog This | Comments (3)

Reservations Futures Market: Nice Idea, Not Sure It Works
November 4, 2008

Back in 2005, when I was a lowly newspaper reporter making barely enough to pay the rent, my Chicago White Sox were in the midst of what would prove to be the greatest season in the franchise's 108-year history. Determined not to miss out on witnessing an ultra-rare Chicago World Series, I set about frantically seeking ways to circumvent ticket-scalper markups that I just couldn't afford.

I came upon a Web site that let users buy and sell "options" on future sporting events—you'd pay market price plus a commission for the right to buy tickets at face value for postseason games involving your chosen team. The catch was, if your team failed to make the playoffs, you were out the cash. You could also resell the options at a later date for a profit (or loss).

The concept has now been extended to include hotel rooms. The company FirstDibz.com has teamed with Sheraton Yankee Clipper Hotel in Fort Lauderdale to offer lodging options for January 7 and 8, coinciding with college football's BCS National Championship Game 30 miles away in Miami. 

For an option to qualify as "winning," the option's designated team must be selected to play in the big game. The options have an initial price of US$30 each, plus a minimum US$5 commission. Winning option-holders then have the opportunity obligation to purchase rooms for the rack rate of US$249-279.

There's good reason for a hotel to get involved in a program like this. Free publicity aside, it essentially guarantees X number of rooms sold—at full rate—without risk of cancellation. 

What I don't really understand is why the guest would want to participate. That is, why would I as a sports fan want to pay additional fees (and, frankly, a higher rate than I could probably get with a little effort) for a lodging option, when I could just as easily book a hotel myself in advance and simply cancel if and when my team gets knocked out? This might make sense, perhaps, if the hotel in question were exceedingly well located; the Sheraton Yankee Clipper, however, isn't even in the same city.

My conclusion: This is a neat concept, and there's really no reason for a hotel not to participate. But I'm not sure it will be successful in reality.

Am I off base on that?

Posted by Adam Kirby on November 4, 2008 | Comments (3)