TOPIC: Room Reservations

I was at the airport hotel area last year. Used the Go express bus system last year and it SUCKED. Especially early mornings when everyone wanted to get there early. This year I found out I could call and get a hotel closer on the account being disabled. Its costing me twice as much but honestly its worth it because being able to walk to my room, take naps due to my exhaustion, or relax in general has no price I would not pay.

I'm going to throw this out there, not in a political way, but from a pure economics perspective.

The room block system IMO is flawed because it is a form of price fixing. Just like any other attempt to artificially lower prices (e.g. gas in the 70s) it leads to overwhelming demand, waiting, and insufficient supply.

Those that do get into the room block (either through lottery this year or sheer luck in previous years) do get rooms at reduced prices. The problem is that in many cases they are paying less (possibly substantially less) than they'd be willing to pay for those rooms. That's why demand on the room block is so high.

Meanwhile, those who don't get lucky will pay even higher prices as the hotels sell the remaining rooms at higher prices to subsidize the rooms that are part of the room block. Some of these people likely have to pay more than they were willing to, stay further away than they wanted to, or just decide not to go altogether.

So what is likely to be an unpopular suggestion is that GenCon should do away with the room blocks. Each hotel is free to set their prices and each attendee is free to make their own reservations. Let the market figure out the fair price for hotels based on distance, etc.

Caveat: I've only used a room from the room block one time, so I certainly could be biased. Every other time I either paid for or used reward points for a downtown hotel.

Part of the complication is that Gencon gets a kickback on rooms booked through the blocks (at least most conventions do) but that just cuts into the hotels' profits more and bolsters your point. Economically, price fixing is bad in the long run. If prices are allowed to rise, on average, it's more rewarding to increase the supply by building more hotels where people want them.

Not that anyone here has the power to do anything about the situation.

If the convention was in a city with a real mass transit system, the Hotel thing would not be an issue. Gen Con has out grown Indy.

The Indianapolis economic development council is reviewing plans to either expand the convention center or build a new hotel. The convention center is huge enough as is, hopefully the data will point to a new hotel.

Kirk, Brad - those are both excellent points, I hadn't considered GenCon's cut or that the hotels would have to inflate their regular prices to make up for the discounted ones. I just assumed it was good old-fashioned price gouging. It happens here in Cincinnati every festival we have downtown, as soon as dates are announced then FWOOMP! prices skyrocket for that time period.

This is my personal vacation granted to me by my lovely wife as her ongoing anniversary present to me each year - even still, I'd rather save money staying outside downtown and have more money to spend on events (and tokens, of course). I'm seeing more of other people's concerns on the issue now though.

We should all band together now and try to get non-block rooms at a downtown hotel for 2016, if we had enough people perhaps we could even get a group discount.

joshua baessler wrote: We should all band together now and try to get non-block rooms at a downtown hotel for 2016, if we had enough people perhaps we could even get a group discount.

Now theirs an idea, TD already gets a substantial number of rooms for volunteers. I wonder if that program could be expanded into a TD hotel block.

"Price gouging" only applies to monopolies. There has to be some form of rationing when demand outstrips the supply. Luck or high prices, take your pick. And remember an empty hotel brings in no money, so they have to charge more when they can to make up for the majority of the time when they can't.

It's like retail stores. Many lose money for ten months a year, then turn a profit from the Christmas season.

When supply is limited and demand goes up, prices have to rise. It's actually good for consumers. Consider - if downtown Gencon rooms were only $100 a night, how many people would keep sleeping four to a room? The same number of people would use up a lot more rooms. And you think getting a room now is difficult... Sure, the lucky few would be delirious but you'd have even more people upset about sleeping at the airport.

I think it was Lake Placid that legislated strict price controls on hotels for the 1980 Winter Olympics. But a large number of inns and hotels had to file for bankruptcy when their sold-out rooms couldn't bring in enough to cover their costs.

Ramsildor wrote: If the convention was in a city with a real mass transit system, the Hotel thing would not be an issue. Gen Con has out grown Indy.

As I mentioned before I think this is an incorrect statement. Indy can and has housed bigger events than GenCon. The Super Bowl had an attendance of 68,658. Bigger than GenCon. The Super has activities that last longer than GenCon (a week vs 4 days). Of course not everyone stays downtown nor do the activities run the crazy hours that GenCon does. However Indianapolis was big enough to support the SB.

GenCon may have outgrown downtown Indy, though there were still hotels available in the downtown area off block that are not within a few blocks when I looked yesterday. I would not want to walk from them but they would be a short drive, cab ride or mass transit.

This said I also want a hotel that is connected like many and yes I live in Indy. I very much understand those that want to be connected. However because every hotel is not does not mean GenCon has out grown Indy.

Sorry rant over.

Kirk Bauer wrote: I'm going to throw this out there, not in a political way, but from a pure economics perspective.

The room block system IMO is flawed because it is a form of price fixing. Just like any other attempt to artificially lower prices (e.g. gas in the 70s) it leads to overwhelming demand, waiting, and insufficient supply.

Those that do get into the room block (either through lottery this year or sheer luck in previous years) do get rooms at reduced prices. The problem is that in many cases they are paying less (possibly substantially less) than they'd be willing to pay for those rooms. That's why demand on the room block is so high.

Meanwhile, those who don't get lucky will pay even higher prices as the hotels sell the remaining rooms at higher prices to subsidize the rooms that are part of the room block. Some of these people likely have to pay more than they were willing to, stay further away than they wanted to, or just decide not to go altogether.

So what is likely to be an unpopular suggestion is that GenCon should do away with the room blocks. Each hotel is free to set their prices and each attendee is free to make their own reservations. Let the market figure out the fair price for hotels based on distance, etc.

Caveat: I've only used a room from the room block one time, so I certainly could be biased. Every other time I either paid for or used reward points for a downtown hotel.

I have been a part of several state and national organizations which plan conferences or annual meetings. Most carefully manage their hotel blocks because they are on the hook financially ifthe block undersells. So the approach to block size is conservative. Substantial financial losses can occur if you guess wrong. And of course, you negotiate the best block price you can. Is this price fixing? No, it's two businesses working toward a mutually beneficial deal.

Now that doesn't mean it's the best deal for the consumer. If you look at the prices for some of those downtown rooms at other times of the year they are much lower than the block prices. On the other hand, look at those rooms in May during the Indy 500 timeframe. It will make your eyes pop. Supply and demand still rules.

Is GenCon too big for Indy? No, Jedi is right that it is not when you look at the total picture. But it is too big for just downtown. And the size and crowding (particularly in the dealer hall) has significantly changed the nature of the event. But that is not a new phenomena for those of us who remember the Milwaukee days.

BTW, the super bowl experience may not be the best example. There was significant unhappiness with Indy hotel capacity for that with some corporate sponsor events being staged as far away as Louisville.

Brad Mortensen wrote: Consider - if downtown GenCon rooms were only $100 a night, how many people would keep sleeping four to a room?

If there isn't a convention in Indy that is about what these rooms cost. I priced one of them at the end of last year and a $289 (last year) GenCon room was only $125. I have not used the GenCon block rooms for at least four years due to its uncertainty and just get mine outright at a decent price and easy walking distance.

Donald Rients wrote:

Brad Mortensen wrote: Consider - if downtown GenCon rooms were only $100 a night, how many people would keep sleeping four to a room?

If there isn't a convention in Indy that is about what these rooms cost. I priced one of them at the end of last year and a $289 (last year) GenCon room was only $125. I have not used the GenCon block rooms for at least four years due to its uncertainty and just get mine outright at a decent price and easy walking distance.

Not surprising. Average occupancy rates nationwide are around two-thirds, so if you're sold out a third of the time that means the other two-thirds the place is practically empty, but there are still bank loans, taxes, utilities and salaries to cover. When there are lots of vacancies, a hotel is probably better off renting the room at almost any rate, even at a huge loss, than to leave it vacant. Event time is when they have to make up for the rest of the year.

Harlax wrote:

Kirk Bauer wrote: I'm going to throw this out there, not in a political way, but from a pure economics perspective.

The room block system IMO is flawed because it is a form of price fixing. Just like any other attempt to artificially lower prices (e.g. gas in the 70s) it leads to overwhelming demand, waiting, and insufficient supply.

Those that do get into the room block (either through lottery this year or sheer luck in previous years) do get rooms at reduced prices. The problem is that in many cases they are paying less (possibly substantially less) than they'd be willing to pay for those rooms. That's why demand on the room block is so high.

Meanwhile, those who don't get lucky will pay even higher prices as the hotels sell the remaining rooms at higher prices to subsidize the rooms that are part of the room block. Some of these people likely have to pay more than they were willing to, stay further away than they wanted to, or just decide not to go altogether.

So what is likely to be an unpopular suggestion is that GenCon should do away with the room blocks. Each hotel is free to set their prices and each attendee is free to make their own reservations. Let the market figure out the fair price for hotels based on distance, etc.

Caveat: I've only used a room from the room block one time, so I certainly could be biased. Every other time I either paid for or used reward points for a downtown hotel.

I have been a part of several state and national organizations which plan conferences or annual meetings. Most carefully manage their hotel blocks because they are on the hook financially ifthe block undersells. So the approach to block size is conservative. Substantial financial losses can occur if you guess wrong. And of course, you negotiate the best block price you can. Is this price fixing? No, it's two businesses working toward a mutually beneficial deal.

Now that doesn't mean it's the best deal for the consumer. If you look at the prices for some of those downtown rooms at other times of the year they are much lower than the block prices. On the other hand, look at those rooms in May during the Indy 500 timeframe. It will make your eyes pop. Supply and demand still rules.

Is GenCon too big for Indy? No, Jedi is right that it is not when you look at the total picture. But it is too big for just downtown. And the size and crowding (particularly in the dealer hall) has significantly changed the nature of the event. But that is not a new phenomena for those of us who remember the Milwaukee days.

BTW, the super bowl experience may not be the best example. There was significant unhappiness with Indy hotel capacity for that with some corporate sponsor events being staged as far away as Louisville.

SB might not be the best example as you mention but it also draws alot more people than just those attendance numbers. The Indy 500 (and Brickyard 400) is another interesting example. The attendances are around 300,000 for each. Granted I have no idea how many of those folks only come in for their race and leave without staying in a hotel, but I do know when they start filling up hotels they do fill up the city and then some. But I understand you point.

I think there are two things at play here. Hotels and the convention center (and surrounding area) itself. If more space is need for gaming/dealer room it is there. Lucas Oil is just south and has the space. I don't know what the costs are but I know local companies will rent for a night to hold company events there. So it has the space it just becomes a question if it is usable or not.

Indy has the hotels (downtown doesn't). So GenCon probably will outgrow Indy, I just don't think we are there yet considering the bigger events Indy does play host to.


I would happily travel to some place that has more hotel rooms within walking distance that would be priced around the current GenCon block pricing (200-250 a night for a double). I would not look forward to traveling to NYC for events again.

Just my two cents