Value in beach hotel pricing on the Oregon coast
James Coke, Proprietor, Rockaway Beach Resort & Conference Center
Hotels cater to three types of customers based on the disposable income they spend on travel.
- The budget-conscious consumer spends as little as possible to gain access to a desirable location. They know from experience and expect that they will forego full staff service, modern facilities, and amenities like pools and on-site restaurants. It is all about the price.
- The elite consumer is looking for lodging properties that provide a prime location, extensive onsite amenities, and full staff services at all hours. It is all about enjoying a comfortable experience. Price is of less importance.
- Most of us fall somewhere in the middle and look for value that balances a positive experience with moderate pricing.
The value consumer is the hardest for a lodging provider to serve well because their expectations are so varied. Some guests seek high human touch and others full automation. One seeks an austere and sterile room while another wants decor that evokes the warmth of home. Some understand the harsh impacts climate has on beachside structures where others perceive poor maintenance. Accessibility equipment is critical for disabled individuals and an inconvenience to others. Families love larger, condo-style rooms while the solo traveler is often satisfied with a less costly traditional hotel or studio format.
Oregon value consumers are both delighted and disappointed when their widely varying (typically urban) expectations encounter highly differential (coastal) hotel attributes and pricing. Hotels see the collision between expectation and reality in guest ratings that span the entire scale from poor to fantastic every day.
Rockaway Beach Resort and Conference Center (RBR&CC) is a typical middle market property that caters to the value consumer and affinity groups seeking a professional beachside meeting environment. It offers moderate prices that balance its unique advantages and disadvantages. The hotel has been a part of the Rockaway Beach city waterfront for over 50 years.
RBR&CC employs a full-service staff during its 12-hour operating day with off-hour guest on-call support. It offers 38 rooms with kitchenettes in a variety of larger condo layouts tailored to the needs of families. There is a pool, hot tub, sauna, and guest laundry on site; and an upper-level event facility with dramatic vistas. Every unit is beachfront with an unrestricted view of the ocean and surrounding capes. This would normally justify premium pricing. But it is an older property that needs accessibility upgrades, décor updates, and building envelope renewal. It does not physically present as a modern hotel and thus is priced in the value tier.
Most of Oregon’s beachside hotels are older structures built in the decades of the 1960s, 1970s, and 1980s. A few were built more recently with better materials and accessibility design, but the rapidly escalating costs of land and construction drastically limited new development. Major chains are not well represented on the coast, which remains a mostly boutique market of smaller operators. These smaller hotels do not have access to public capital markets and thus cannot afford the heavy investment needed to update their facilities. The beachside climate of salt and storms rapidly degrade buildings, and without investment the older properties just keep getting older. Properties cannot be recycled into new development because permitting is so difficult to obtain on the coast, so they continue to operate in ‘grandfathered’ status passing from one owner to another.
The RBR&CC owners have explored doing re-development of the property to better meet the expectations of elite consumers moving down-market in a weakening economy. They found that any significant remediation or improvement of the property is subject to oversight from the City of Rockaway Beach (roads, parking, utilities), Tillamook County (structural permitting), State of Oregon (beach access), Oregon Shoreline Commission (land use) and the Federal Emergency Management Agency (coastal flood zone). No developer or financial institution contacted was willing to underwrite development in such a regulated environment where agreement among the regulators takes years to achieve. So, the property is undergoing gradual and incremental upgrade of its existing design rather than a full renewal.
Guests also have wide expectations regarding hotel policies. Family value hotels struggle to reconcile the needs of smokers and non-smokers, the terrible combination of warm hot tub water and young bladders, and events that want to party well after quiet hours. We patiently explain that marijuana, although legal, cannot be smoked or vaporized while onsite. The Americans with Disabilities Act requires us to honor any room request made by a disabled person with a service animal even if they are unwilling to use a designated pet room. The cost of removing all allergens for the next guest in the room can overwhelm the room revenue earned but no pet fee can be charged. Some guests treat hotel furnishings far more roughly than at home, and we constantly find our room blankets, kitchen service items and chairs abandoned in the beach sand. Yet some guests view damage fees as unfair and something that should be a part of the basic room rental. A surprising number of guests honestly believe that hotel rules are arbitrary or capricious, rather than being based on hard-won past experience.
Meeting every guest’s expectation is beyond the financial ability of most Oregon coast hotels. Likewise, very few customers can afford to pay the price of perfection. Value pricing is a double-sided transaction.
It is important that the value customer do some homework before booking a room on the coast. You are not going to get the universal Best Western or Marriott experience. The coast offers a wonderful choice of B&Bs, vacation homes, and hotel properties that reflect varied local culture and tastes. Be sure to match your expectations to what the property offers so you will be delighted rather than disappointed. Review the hotel policies in advance; many hotels like RBR&CC post them on their website. Look at the pictures on the hotel site to be sure the living space or meeting area will be comfortable. Don’t exclusively trust what you see on the Expedia.com or Booking.com platforms as that content falls rapidly out of date. You will anyway often get a better rate booking direct with the hotel since the platform fees are heavy.
There is wonderful value to be found among Oregon coast hotels. Pick the property that will surprise and delight you but recognize that you may give something up to keep that moderate pricing.