We’re not experts in the hotel business by any stretch of the imagination but we thought the idea was to rent as many rooms as possible in order to achieve a high occupancy rate. But we must be wrong. 
Recently we’ve overheard tourists being told that the hotel is 100% booked through the end of the year. On the other hand, we’re aware of rooms that have been sitting empty for months. These are rooms that were being rented prior to this summer, that is during Stanley’s tenure. Some of these rooms have been recently vacated by permanent tenants while others have long been transient rooms but mainly of the higher priced variety. What we’re asking is, since the demand is clearly there why are rooms sitting empty? Wouldn’t that diminish the cash flow?
We are truly a bit puzzled by this odd and seemingly inexplicable way of doing business. Does anybody else have any ideas? Send in your theories to the comments box.
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Hotel Chelsea Blog
17 responses to “Hotel At The End of the Universe”
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they may not have the legal right to rent the rooms that were recently vacated, or maybe they are doing renovations in some. the other theory is since they city is pretty much booked solid through the middle of december hotels try to hold some rooms which they could sell to last minute travelers for very high rates. high rates is better than high occupancy because almost all of the price difference is profit
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Sounds like BD Hotels is trying to lower the cash flow of the building to get shareholders to sell at a lower price. But does Marlene Krauss know about this? Why would she benefit from selling at a lower price?
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They also may be warehousing the rooms so that the physical condition of the rooms will deteriorate and which will help decrease the value of the building.
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You have to remember, Witness, BD Hotels interest is not the same as Marlene Krauss’. If Marlene Krauss wanted to sell the building, she would presumably want to get the highest sale price possible. But, if BD Hotels wanted to BUY the building, they would naturally want to pay the LOWEST price possible — putting them in direct conflict with their new employer, Marlene Krauss.
They could therefore be looking for ways to make it appear that they are operating the building at maximum capacity/efficiency while earning the smallest cash flow to demonstrate that there is little room for improvement or gain and that that should be reflected in the sale price of the building, i.e. making it lower.
They could maintain this illusion of efficiency/low cash flow by what’s called “warehousing” hotel rooms, i.e. emptying the rooms, but not renting them, possibly not even having them show up on the books or rack.
Naturally with a lot of excuses about renovations, etc.
But have you seen big construction crews recently? Or even an errant housepainter?
All I can say is that when Stanley wanted a room renovated, hell had no fury like those housepainters — those things got DONE.
And lest you think BD Hotels is trying to save money, don’t forget that any renovations BD Hotels chooses to implement here as managers will be paid for with someone else’s money, i.e. Marlene Krauss’ and the Bards. Not theirs.
They have NOTHING to lose by renovating these rooms and renting them out, but it seems to me, a good deal to gain by keeping them empty.
And don’t be fooled by the hordes of people sitting in the lobby like an Indian bus station waiting for their rooms as if the capacity of the building magically tripled overnight. It’s the oldest trick in the world — keep people lined up outside the club beyond the velvet rope to make it look like everyone’s trying to get in.
This hotel has been 100% full hundreds of times over in recent years and we’ve never seen people waiting like this.
Stanley either tried to get them in as quickly as possible or at least referred them to a decent restaurant for Pete’s sake, but then again, he had nothing to hide — he wanted the rooms rented.LikeLike
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wow, do you think this means marlena krauss may want to get rid of bd hotels? sounds like they’re doing her dirty.
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as to the first poster’s remark that “high rates are better than high occupancy”, does it not occur to you that they could have BOTH, i.e. high rates AND high occupancy? they’re not mutually exclusive fiscal strategies.
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Marlene Krauss was better off with the Bard family in charge. BD Hotels is not going to be looking out for her best interest. Plus, holding on to rooms just to gouge potential customers (as the first commenter suggested) seems unethical!
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Someone here says they have “nothing to lose” by not renting rooms — but what about their own profit? Don’t they lose money too by not renting the rooms they have?
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I agree, Marlene Krauss was better off with the Bards. These people are totally incompetent.
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yes, denizen, they do have profits to lose. most management companies make 6 cents off of every dollar. word on the street says that bd is getting three times that. but to lose 18 cents off of every dollar (when we’re talking about a few thousand dollars) versus lowering the sale price by HUNDREDS of thousands (if not millions) is a small price to pay.
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and the bards and krausses lose 82 cents besides — sounds like those dividend checks are going to be dryin up. they should sell, right bd?
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We were all better off with Stanley. Marlene and David too. But I don’t think Krauss and Elder can sell the hotel without the Bards assent, can they? Maybe they’re just a) incompetent and b) full of shit.
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Right 421to323, i’ve always heard the bards had to approve any sale. But…if bd hotels is intentionally trying to sink the business and dividend checks are drying up, the question becomes — who can hold out the longest? who has more money and who has more guts?
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The Bards definitely have more guts. You think Stanley is going to suffer this humiliation and then give in? Never. That guy will never give in to these creeps – he stands for something.
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Sounds sleazy to me.
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So, Marlene Krauss gets screwed by BD Hotels. Big deal! Can’t say she didn’t have it coming to her.
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BD is BS
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