'Budget' Hotel Rooms go for $370 in NYC

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. October 14, 2008

NEW YORK, NY, December 12, 2005. Cost-conscious visitors to the Big Apple who favor budget hotel chains are in for a rude wake-up call this holiday season: a $330-a-night Super 8.

That's what some people checking out of the chain's Times Square hotel today paid to spend the night. The rate for tonight hit $370 -- even when booked a month ahead of time -- before a raft of last-minute cancellations drove it down.

"It's ridiculous," says Muriel Upton, a traveler from Michigan who paid nearly $300 to stay at the hotel this week.

Budget hotels such as Motel 6, Super 8 and Travelodge have largely been left behind in this year's run-up in room rates. Through October, budget rooms are up 3.5% from 2004, vs. 5% for all hotel rooms and 7.6% for luxury hotels, says Smith Travel Research.

But in hot cities at popular times, budget hotels can charge nosebleed prices. While in many cases it's simply a case of location, some industry experts including Mark Woodworth of PKF Consulting say it could be a harbinger of higher rates at budget hotels nationwide. Already, there are some big-budget prices at chains that travelers typically might expect to be dirt cheap:

*$330 Super 8. Usually pricey New York has only gotten worse. Last year at this time, the Super 8 rooms went for $250 to $299, says Vijay Dandapani, chief operating officer of Apple Core, which manages the property and other budget hotels in New York.

*$250 Holiday Inn Express. The Holiday Inn Express in Pasadena, Calif., boosts rates on New Year's Eve because it is on the Tournament of Roses parade route. A two-night minimum brings the total cost to at least $500.

*$250 Travelodge. In late November, visitors booking the Travelodge on the Las Vegas Strip for New Year's Eve faced a $250-a-night rate for the standard room. An upgrade to the "Sleepy Bear" room with a bedspread bearing the Travelodge mascot costs $300. That's up from the average daily rate of $120 for New Year's Eve last year, says hotel general manager Liz Morales.

As of late November, the hotel's average daily rate was $180 -- and rising as rooms sold at $250 or $300.

For less than the price of the Times Square Super 8, guests could stay this week at the Ritz-Carlton in Phoenix, for $249 a night. It boasts an award-winning high tea, a cigar bar and full spa. The Super 8 offers an iron and ironing board.

Dandapani admits his visitors would rather pay less, but he says they know his hotel is cheaper than alternatives. "They go away feeling content," he says.