There is an article in the travel section of the New York Times today (Sunday 23) about paid upgrades that the hotels and airlines are offering and yours truly was interviewed for it (you can read the piece here).
I have written about the paid upgrades at Club Carlson, Hyatt and Hilton hotels times in the past (all these three companies are using the same technology provider called Nor1) and my experience with the Optiontown that Vietnam Airlines uses for their upgrades.
The reason, why all these companies are using these, is simple. They want to extract more revenue from the upgraded rooms/suites and, in the case of airlines, from their business and first class seats. Some of these might have otherwise gone empty, hotels and airlines may have had to upgrade some of the guests/passengers for free (base level inventory is often oversold) or elite members might get them complimentary based on the status they have with the hotel/airline.
If you are elite member with the hotel that provides club room upgrades and/or suites on complimentary bases, I see very little benefit of playing with the Nor1. Usually, only the most modest upgrade is marked as complimentary for the elite member and all others come with the price tag.
This doesn’t mean that the hotel would only upgrade you to the room that the Nor1 shows as free based on the status you have, but often the hotel/front desk clerk processes much better upgrades (in my case most of the time).
With the airlines, it is somewhat different. Most of the airlines outside of the North America do not offer complimentary upgrades even for their elite members and bidding/paid upgrades can often be the only way to access business/first class seats at a discount. As was the case with the hotel rooms, airlines often oversell their economy cabins knowing that they can “roll the cabin” meaning sell upgrades to business/first class and/or do operational upgrades that are usually processed in the order of status.
As an elite member with most of the hotel chains, the Nor1 doesn’t really offer any benefits for me. Some may argue that it could rather lower the room/suite inventory that the elite members such as I are upgraded into.
For a non-elite member, these may offer upgraded accommodations at a lower coast compared to purchasing them up front, but I would rather “haggle” with the front desk.