My understanding is hotels are actually high margin in the travel space. That's why all the airlines and travel sites ram and jam you into booking a hotel. They make $10-30 per night hotel commission but only $1-5 on a airline ticket.
Also, it's a fixed cost business in general. So, if a hotel gets those last three or four rooms rented a night that can be their profit. That why Hotel Tonight and Hotwire, etc. are able to get sick, sick deals.
Very good point. I still don't think most customers would choose a different hotel then the one they want over pulling out their wallet and using a debit card. I don't think most hotel chain CEOs would go for it either.
Also, it's a fixed cost business in general. So, if a hotel gets those last three or four rooms rented a night that can be their profit. That why Hotel Tonight and Hotwire, etc. are able to get sick, sick deals.