A Vacation Investment
The Early Bird Discount
Published on July 03, 2014
The Early Bird discount program is undoubtedly our most popular discount program. In fact, it is the only discount that we offer during the summer season and one of the best Cape May hotel deals.
First of all, what is it? For guests who book a reservation 1 year in advance we put together two different discounts. The “Rate Guarantee” is the first component, which is the extension of the current year’s room rate for next year’s reservation. Our room rates increase by $5/night each year, so the Rate Guarantee saves $5/night. The second component of the program is the “Earlybird Discount” itself, which is an additional 5% discount off of the entire remaining room charges (net of the Rate Guarantee discount). Like all reservations, we ask for a 50% deposit to hold the room. In the case of this discount program, we ask that our guests pay us this deposit in the form of a check (it doesn’t make any sense for us to extend a discount to our guests and then have to pay an additional 2-3% fee that the credit card company charges us every time we accept payment with a credit card). Like all deposits we collect at The Queen Victoria, they are refundable prior to the 21-day cancellation period for any reservation.
Personally, I like to think of the Early Bird program as a vacation investment. If you were to evaluate the after tax cost savings from the discount as a “return” on the “investment” of your deposit, there are very few investments that could compare favorably. For example, if you were to reserve a room that would cost $300/night for 3 nights next summer, then here is how the numbers would break down:
Rate Guarantee: $15.00 savings
Early Bird Discount: $44.25 savings
Pre tax savings: $59.25
After tax savings: $67.55
Deposit Amount $420.38
Return on Investment: 16.07% ($67.55/$420.38)
So, not only does your deposit earn a return about 8x greater than a bank will pay you for a 5-year CD, but you also get to look forward for an entire year to a visit to The Queen Victoria and Cape May, which is priceless.
I think that most of our guests who participate in the Early Bird discount program do so not so much to save money, but rather to insure that they’ll get the room they want on the dates that they want. In fact, during some times of the year some rooms have become so popular that guests frustrated by the unavailability of their desired room for their desired date have started reserving rooms 2-3 years in advance. We’re happy to accommodate them, of course, but it typically isn’t necessary to book that far ahead.