A LoyaltyLobby reader alerted me yesterday about emails that the Le Parker Meridien in Palm Springs was sending about award availability during the Coachella festival.
This is the same hotel (as well as its sister property on New York) that were fighting with the Starwood in court regarding falsifying occupancy statistics to milk higher award reimbursements. Starwood claimed that it had reimbursed more than a million in false claims. You can read my earlier piece about this lawsuit here and here.
You can access Le Parker Meridien Palm Springs website here.
Why Le Parker Meridien Palm Springs is sending these emails?
You must first understand how hotels get reimbursed for “free” stays. The base level compensation is usually quite low, but with Starwood it is higher compared to Hilton or Marriott.
The compensation when the hotel is full (at 95%) is tied to the ADR (Average Daily Rate) of that night.
It is better for Le Parker Meridien Palm Springs to dump the unsold rooms to awards and get the ADR of the night (as long as most of the guests have paid that ridiculous $2,400 per night) than discounting and getting lower reimbursement. The key, however, is to ensure that the occupancy rate is at 95% or higher.
It seems that the Le Parker Meridien Palm Springs has learned something from the past and is not trying to have “ghost” guests on these high occupancy nights to get the ADR reimbursement.
The strategy now is to have a full email blast (I got two of these emails) and get members to book the nights that would trigger the max compensation from SPG. There is nothing wrong with this.
SPG may, however, object that the property has blatantly farmed all the email addresses that the guests have had on file at the time of making the reservation and then added them to an internal mailing list outside of Starwood.