Do you ever find amazing hotel deals and wonder if you can flip them for profit? Have you been stuck with a pricey non-refundable reservation that you can no longer use? I have and this was my experience:
100% Guarantee
That’s what I thought last September (2018) as I booked my hotel room for Super Bowl LIII the following February in Atlanta. No, I wasn’t crazy enough to think my Jacksonville Jaguars were a lock to make it to the NFL’s championship game, an accomplishment that has eluded the franchise throughout its 25-year history. Rather, I thought that my price, which was effectively $270 all-in for three nights (Friday-Monday) in a nice Hyatt Place on the outskirts of Atlanta, was a lock to be worth much more than that five months later when America’s collective eyeballs (and the bodies of two fanbases) would descend upon the Georgia capital and the new Mercedes-Benz Stadium. What’s more, I was using points so I had no upfront cost (the points were wasting away in my Hyatt account) and according to the hotel the monetary value at the time of my reservation was approximately $1200!! Yes you read that right…if I was making this non-refundable reservation back in September with actual dollars, it was right at $400/night after tax.
STEP 1: Buy Low!!!! 15,000 Hyatt points = $270 value according to reputable sources
Despite committing to a non-refundable reservation, I felt great. I figured my reservation was worth approximately $1200 as-is, with the potential to increase if the demand insanely ratcheted up as it had done the previous February in Minnesota. Figuring I might have to sell at a 40-50% discount, I was still thrilled by the idea of converting 15k points into $600 or more of actual cash, even if it would take 5 months to wait for the payoff. Of course, none of this would matter if the Jaguars did indeed make it to the Super Bowl, as I would be using the reservation myself and the ROI = priceless memories. Alas, shockingly quickly, this dream disintegrated and I was back to just selling for, hopefully, a profit.
STEP 2: Research Resale Platforms
How did I plan to sell my reservation??I had done some cursory research on two secondary market websites: Cancelon and Roomer. They both had their share of success stories as well as scathingly negative reviews. I wasn’t worried too much about user experience or consumer reach as I figured the Super Bowl was as consistently high demand an event as exists in the US and people would do whatever it takes to find housing that fits their budget. I have to buy someone else’s hotel reservation on a questionable website? Super sketchy but I’ll bite the bullet since I can’t afford double the price to purchase directly from the hotel. Both of these resale sites would handle the reservation transfer with the hotel, although there were plenty of horror stories about complications. Nevertheless I felt reasonably secure that given my enormous purchase discount I would be able to lure a buyer with a relatively cheap room while still maintaining a healthy profit. And with my substantial history on Airbnb, I figured in the worst-case scenario I would list it there and directly handle the transfer with the hotel myself. In all three examples, the website would take a 20-30% cut.
STEP 3: List Reservation For Sale
So with 3 weeks until the big game I created accounts on Cancelon and Roomer and listed my hotel reservation for sale. It was a fairly simple process; they both required hotel name, address, an original reservation price, the new listing price, and a copy of my hotel reservation email so they could confirm the booking was valid. I cannot recall which was which but one of the sites allowed me to select my specific hotel and then automatically populated all the hotel info, while the other one was unable to find my hotel and required me to input some basic details. They must have later updated their database as when I looked at my listings in the future they both provided complete detail about the hotel’s location, amenities, images, and much more than I had input. I initially listed for $800, a healthy discount from the original $1200, but only a notch below the $1000 it was now advertised at. In any case I was only trying to get my listing live…to me the true selling window did not begin in earnest until the conference championship games were over, the Super Bowl matchup was determined, and actual fans would begin finalizing their travel arrangements.
Hate the Patriots
The New England Patriots have ended Jaguars’ playoff runs four times, including twice in the AFC Championship game. But even with the Jaguars nowhere close to the postseason, the Patriots again found a way to ruin my dreams. As Tom Brady led his squad down the field for an emotionally deflating game-winning score in OT over the Chiefs, he also let the air out of my hotel reservation valuation. Conventional wisdom suggests that Kansas City fans would have been far more enthusiastic to see their team in the Super Bowl for the first time since 1970, as opposed to the Patriots on their ninth trip in the last 18 years. Likewise, many observers felt the rabid Saints supporters would have followed their team on a relatively short drive to ATL in far greater numbers than did Rams fans in just their third year in LA and needing to fly all the way across the country. This assumption was reflected in ticket tracking, which showed prices remaining relatively flat and even dipping before gameday while the number of game tickets resold were quite low compared to the previous six years.
STEP 4: Wait And Watch
For the next two weeks I began to lower my price on both websites every few days. $800 eventually became $600 and then $400 with still no luck. Price changing on Roomer was quite simple and could be done from my account online. Cancelon however had a glitch and required me to contact customer service every time. In fact, I actually do not think my Cancelon listing even went live until the last few days when I expressed concern to the online agent. That was frustrating and probably limited my audience somewhat, but when it worked it was cool to see the listing show up on Kayak and Priceline searches.
STEP 5: Back Up Plan Time
Finally, just two days before check-in, I created a new listing on Airbnb. I clearly and explicitly stated that this was a room in a hotel and provided the hotel’s information and website. Pricing my listing was trickier than with Cancelon and Roomer. Those sites were reselling my entire 3-night stay for a fixed price. But with airbnb I had to provide a daily price for each of the three nights I made available. I decided to go with $110/night with no cleaning fee. I required guests to contact me before booking for several reasons. First, so that I could explain that I was the holder of a non-refundable reservation and I was going to add their name to my room so that they could check in. On Airbnb I always want to be as transparent as possible so that guests have little reason to be upset or disappointed. Secondly, I wanted to gauge the level of interest in my listing before settling on a final transaction/price. Supposing someone wanted my room at the asking price for just two nights, I would rather give a small discount to someone else who would take it for all three. Lastly, it is just better to be able to control when someone is going to book when you have a listing up on multiple sites.
The Sale
I received three inquiries in the first 24 hours of listing. Two of them were serious but they both only wanted to stay the Friday and Saturday nights before Super Bowl Sunday. I informed them both that they wouldn’t have to check out until Monday, which meant they could leave their bags at the hotel and not pick them up until after the game. If this was a benefit to them, we could agree on a $30 upcharge. The first girl did not seem very agreeable, so I told her that I was extending the same offer to someone else who was interested. If she did not accept, then I would let her book for just the two nights since she had inquired first. Ultimately the second girl jumped on it and quickly secured the reservation. The next day, I emailed and called the hotel to add my guest’s name to the reservation.
Final Thoughts
I walked away with $242.50 after Airbnb took its fees. I believe I could have done better had I listed on Airbnb from the beginning and set my starting price at around $200/night. I did not pay any hotel/bed taxes on this sale, which is something that you should do if you host in a region that imposes such a tax. That said, this was a resale of a hotel reservation so it seems like it should be exempt from being taxed…of course I do not actually know so don’t take this as legal or professional advice. But if Cancelon or Roomer sold the rooms there would not have been any tax collected.
I did not find any language in the Airbnb Terms of Service regarding secondary hotel reservations. At the time of this publication they do permit hotel proprietors themselves to directly list rooms on the platform (under a “hotel” category), but no explicit reference is made (that I could find at least) about resales. I think it is obvious that both the tax and TOS issues should be clarified if you plan to do this on an ongoing basis or on a larger scale. Another potential risk comes if the guest does some serious damage to the room or engages in illegal activity. The guest will have checked in under their name and made deposit with their own payment method, however I could imagine the hotel coming after you should they need to. This is something to look into if Roomer or Cancelon offer any kind of protection. Airbnb does, assuming this use isn’t against their TOS. But I have no intention of trying this again. It was simply not worth the time or hassle. I have no regrets swapping 15k Hyatt points for $242.50 in cash (a normal swap with Chase using their Ultimate Rewards system would only net $150), but considering the amount of effort I put into this it would not be worth doing again. Unless…perhaps…if the Chiefs can beat the Patriots this year.
