Finance Your Budget Insider’s guide to paying less for hotel rooms

Insider’s guide to paying less for hotel rooms

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When spending hours trawling the internet to find the perfect hotel, it can seem a mystery as to why rooms cost what they do.

Can you get a better deal through websites or directly from hotels? And when should you book to get the best deal – months in advance or on the same day?

Then there are the hotel rooms the average or rich can only dream of.

The Steinway in the Royal Penthouse.
The Steinway in the Royal Penthouse.

The President Wilson hotel in Geneva, Switzerland commands $77,300 per night for its Royal Penthouse Suite which is 1800 sqm, has panoramic views of Lake Geneva, 12 bedrooms, 12 bathrooms, a Steinway and its own fitness gym.

That’s more than the average Australian wage per year for ONE NIGHT.

No Australian hotels quite compare, though the Governor Suite in the Park Hyatt in Sydney’s reportedly charges up to $12,000 per night and the Sydney Four Season’s Presidential Suite will set you back $5800.

Hotel Qualia in Queensland’s Hamilton Island in the Whitsundays start at $995 in the off peak, with the most expensive rooms going for about $5200.

So what goes into the cost of a hotel room?

Peak season and demand

Peak demand: Staying in Sydney Harbour in New Year's is expensive.
High season: Staying in Sydney Harbour in New Year’s will cost more than any other time of year. Photo: Getty product director Donna Rodios says the biggest influence is supply and demand for the location or time of year.

“If [consumers] go against the flow and avoid the most popular tourist areas during peak season, the supply of the hotels will outweigh the demand,” Ms Rodios says.

The Accommodation Association of Australia agrees demand is the biggest factor.

“Generally speaking, rates are driven by demand and if consumers want a product such as hotel, motel or serviced apartment, the operator will set the rate according to the demand,” spokesperson Richard Munro says.

Demand increases due to time of year, season, and can also vary during different times of the week with weekends often more expensive.

From a consumer perspective taking a holiday in peak times like mid-ski season or school holidays might mean higher prices or requirements to stay more than one night.

Big brands and Star-rating

The quality and service that comes with a five star hotel means you’ll pay more for your room.

These extras can include free wifi areas, access to day spas, sauna and swimming pools, valet parking and modern conveniences like pay TV in rooms.

The Accommodation Association of Australia’s Richard Munro says star ratings and consumer sentiment assist consumers in determining if that product suits their requirements, however “not all consumers want five-star all of the time”.

“You will see that big chains have adapted their product portfolio accordingly to cater for basic to deluxe accommodation needs.”

Location, location

Idyllic locations often come with a higher price tag.
Idyllic locations often come with a higher price tag. Photo: Getty.

Beach front, city centre, wherever it is a prime location will attract top rates.

Opening last week in Little Collins Street in Melbourne’s premium end of town, the Sheraton Melbourne Hotel account director Greta Bolger says the hotel set its rates inline with others in the area with its brand and location also key factors in determining price.

Service and staff

AAA’s Mr Munro says one of the biggest expenses can be staff and labour costs – particularly in Australia.

“If the property trades heavily on public holidays such as a leisure destination, this will also be a big determinant on costs, given that casual employees are paid 275 per cent on those days of work with penalty rates and loadings.”’s Ms Rodios says the larger the hotel the more expensive it might be to clean.

“The cost of servicing and cleaning a hotel is also taken into consideration as cleaning a large five star hotel room is often higher than a smaller, self-service hotel room,” she says.

Four ways to save

1. Stay at a new hotel
The Australian Accommodation Association says big brand names will discount when opening to attract customers. The Sheraton in Melbourne is a good example, now offering cheap rates until the end of September.

2. Stay longer
Wotif’s Ms Rodios says a longer stay is more cost effective for a hotel, therefore cheaper for you. “Holidaymakers can often get a great saving on a hotel price if they stay more than one night or receive bonus inclusions as an incentive to stay longer,” Ms Rodios says.

3. Off-season
Off-season you’ll get better rates. Another tip is to target business hotels on public holidays. “With business travellers off duty over the public holidays, lots of CBD and city hotels have excess supply so you’re likely to see some great rates – travellers can also take advantage of swimming pools, spa and gyms, without the usual crowds,” Ms Rodios says.

4. Compare online
While you can nab a good deal on sites like Wotif,,, the Sheraton says all of the hotels under its parent group Starwood Hotels & Resorts will have the same price as on any third party websites.

Likewise, the Accommodation Association Richard Munro says “direct can yield the best results”.

“My advice would be to book where possible, directly with the property for the best rate, as the manager or owner of the property have the final say as to the price they charge the consumer,” Mr Munro says.