Hotel Pricing very high? Pretending to be sold out? Example: Fullon Waterfront Hotel in Tamsui

Discussion Open Forum
1

This is partly a post to share a data point. And partly a post to ask for help to understand it.

I am trying to figure out Hotel Pricing in Taiwan. Some places seem very high priced and look like they are not getting many tourists. But they aren’t dropping prices to be competitive.

Is this common, that hotel operators are stubborn and do not lower prices?

Example

Fullon Hotel Tamsui
Price is $137usd per night (screenshot), approx 4000 NT per night
The place is huge. Maybe 100-300 rooms.

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I think their occupancy rate is very low based on the parking lot and lights on at night (i live nearby and go bicycling nearby). Probably between 30-50% most of the time.
Also, sometimes they show up on Agoda as “sold out” but then I check the parking lot and it feels empty. Not many tour buses either
The feel of the area is super dead on weekdays and has some life on the weekends. It is not bustling.

Background:

Before COVID and before tenser cross-straight relations, there were (according to a not that reliable friend) a lot of China-Mainland tourists and many tour buses. Then the China business dried up. But prices did not drop (a guess, i don’t have old pricing, but i assume it did not drop because pricing is high now).

There are still a good amount of small and large group tourists to Tamsui, from Korea and Japan mostly. And, of course, there are wealthy Taiwan tourists who can afford a rate of $137 usd.

But based on the idea of low occupancy rates, I am guessing the hotel is losing/bleeding money.

There is one hotel nearby of similar quality (Golden Tulip) that os consistently 1000 NT or $30 less.

But the Fullon Hotel is the only one directly on the waterfront at fisherman’s wharf.

possible explanations

  1. The owners are rich and don’t care about losing money.
  2. The $137 is the rate for self-booking, but most bookings are from agents or group tours. Their real average rate could be lower and they are competing in that space.
  3. They make more money charging $137 than they would dropping it to $100.
  4. Occupancy rates of 30-50% outside the city center are normal?
  5. Their main/target clientele doesn’t mind paying 1000-2000 more NT and prioritizes the location.
  6. There is cartel/triad/mafia connections so their main business isn’t renting rooms.
  7. My information and assumptions are wrong. Maybe they are actually selling out.

This is all speculation and I don’t expect hard evidence.

bigger context

Overall, it fits into something I have noticed with real estate and higher-end goods: people would rather not sell or sell very little than drop the price

Normal business owners cannot do this because they will go bankrupt. But people where the business is a hobby or a small part of a big portfolio; they price high. Maybe because it is an obsession with luck (“if I get the big client, then I am lucky”) or a pride matter (“i am quality so I don’t care about market conditions. This is what I am worth, and if you don’t agree, f*ck off”)

2

Understatement of the year. I’ve seen cemeteries at night with more movement.

3

I used to take my son fishing on the wharf there. It was one of the few places in Taiwan that was almost never crowed.

4

This is common practice in Taiwan. They won’t lower the price, complain to the government and ask for Chinese tourists.

5

Probably stubbornness of owners as they claim it’s a five star hotel…which some would say is laughable.
This hotel is part of a big group.

6

I think the key explanation is that hotels are unable to find enough workers at the prices they are willing (or able) to pay. They can’t open all their rooms for visitors because they would be unable to have all of them cleaned.

And this situation is exacerbated by the gap in demand between weekdays and weekends. I’m not working in the industry, so I might be off base, but my observation is that, outside of hotels in the downtown areas of the major cities, most hotels rely primarily on domestic tourists, who disproportionally travel on weekends only. Maybe some hotels could fill all their rooms on Saturday night, but that would require them to have more staff available on weekends only, and they can’t find/train enough part-time workers at the prices they would need to offer to make this work. Thus, hotels that appear half-empty but cannot be booked, especially on Saturday nights or during long weekends.

Though I would not be surprised if that particular hotel (the Fullerton in Tamsui) had especially relied on Chinese tour groups and might be struggling even more than others.

7

Yes this is common. Hotels will close off floors reducing supply and jacking up prices.

Look at the Le Meredian hotel in Hualien.

NYC prices, but its a ghost town.

Or the Four Points on Penghu. You can barely book online via the official Marriott channels

This is why everyone from Taiwan goes to Thailand or Japan any chance they get.

8

Not just the hotel, the whole are is depressing if what you want is to drink and eat something. For walking around at relative peace it is great. So, I guess it’s a great area because there aren’t many quiet places in Taiwan. No cars too.

9

Thank you. I forgot about the possibility of labor shortage, which I know is widespread in Taiwan.

Yeah, they might only open a few floors. I have seen this strategy in Bangkok.

10

On the topic of beautiful and quiet…

The nearby beach (Shalun Beach) about 1-2km north, is stunningly beautiful.

It also has zero facilities right now. And the entrance is barely marked and hidden.

Something is being built near the LRT stop (Shalun?) which might be a visitor center or a strip mall/commercial area.

11

I’ve heard of hotels that close floors and wings during off-peak seasons, then reduce housekeeping etc. So they could have full occupancy… but still have empty closed rooms.

12

  1. This hotel is not especially expensive by Taiwan standards–about NT$4,500/night. A very standard price in fact.

  2. It appears to me from their website that you can get 25% or so off on weekdays if you mess around with their membership etc.

  3. Upper middle class people won’t stay anywhere that is too cheap, so lowering prices is bad for the brand if done directly.

  4. Labor shortages are a huge problem. It may cost out better for them to close most of hotel during week and not lower prices.

  5. Its owned by a big construction/property development company.

  6. This group also runs the brand new 370-room Voco Chiayi Fullon Hotel, which makes no business sense to me, but what do I know.

  7. I stayed at the Chiayi location. It was a good value at NT$4,500 but as I recall, they gave us NT$1,000 off as walk-ins. Quite common. Huge rooms. Sparkling clean etc. A decent motel room in California cost this much. This was way better. They clearly had a skeleton staff and very few guests (weekday).

  8. They operate around 20 hotels around Taiwan. They probably know what they are doing. Perhaps it is some colossal scheme to build luxury apartments on former hotel sites in due course.

13

If you book a hotel room online it’s always more expensive IME.

14

Yes, why don’t you just go ask them in person if you want to stay there.

Prices are basically similar at this place in Jinguashi.

15

This discussion in mandarin is equally as heated. Post covid most people are feeling a bit ripped off with poor value for hotels now. Shit quality, high price. It’s why if the choice is mine I always go love motel. Private, quiet (proper sound barrier), way more fancy, larger, cheaper, ha e your own private parking, family rooms available, far more professionally cleaned (practice makes perfect). Great in places where one drives and isn’t sleeping there for the scenery. Cities, near highways etc. Doesn’t help is somewhere pretty, ie. Not in a city.

Otherwise I go for 1000 ones. The quality is usually on par with the 3000 ones and with less chemical fumes and comfier atmosphere :man_shrugging:

16

I mean, you don’t have to justify it to us :grin:

17

Who stays in a hotel in Taiwan unless its paid for business?

18

I do. Sometimes i wanna go to Kaohsiung for a weekend and it’s cheaper or costs the same rather than taking two extra bus/train/HSR trips to get a cheapy local hotel.

19

I was wondering who it was.

20

Well, the government sometimes pays for it too :hugs: Otherwise, millions of people stay. Me and nearly everyone i know often do.

For those expecting discounts, learn the “tour bus game”. Bring in bus loads, get the cheap price. There are a lotnofnpeople that roganjze group buys/travel that take advanatage of this. If they lowered prices too much the bus load people would expect a thicker end envelope.

Also, for those just wanting rest jn peace and quiet. The religion run hotels tend to be going under a renovation fad :wink: good deals to be had, and not so sad like before.