Jul. 13, 2003 - In a tough economy, one of Wisconsin's major resorts is filling rooms with its let's-make-a-deal offer on room rates. 

Taking a cue from Internet buying service Priceline.com, the Heidel House at Green Lake has been running newspaper ads since May inviting travelers to "name your rate" and promising that "all reasonable offers will be accepted." 

"By no means is it desperation at all," said Chad Buros, director of sales and marketing for the 199-room resort. 

It would be more accurate to think of the offer as a clever marketing strategy -- and to remember that the right to define the word "reasonable" rests with the resort. 

So an offer of, say, $75 a night for the third week of July would draw what response? 

"No, we would not be able to do that," Buros said. 

But the resort has accepted $99 for rooms during slow times of the week, mostly Sunday or Monday nights. Prices range from $199 to $309 for standard rooms on peak volume days. 

The whole idea of negotiating rates is a long-standing tradition in the travel industry. It is commonly used for convention and group booking, Buros said. 

Priceline.com popularized the practice by making the process available to leisure travelers on the Internet, allowing consumers to bid for airline seats and hotel rooms. The service matches the bids with airlines and hotels that have unused capacity. 

But this is the first time the Heidel House has offered leisure travelers the opportunity to name a price. The resort chose to make the offer directly to consumers rather than use an Internet service such as Priceline.com because the Web sites are better suited to hotels in major metropolitan areas, Buros said. 

"It's a different approach," said Trisha Pugal, president and chief executive officer of the Wisconsin Innkeepers Association. 

While the "name your price" ads are generating a lot of phone calls from customers, Buros said the larger reaction has been one of shock from the resort's competitors. 

Pugal confirms that everyone in the industry has taken notice. 

"There are a number of properties that would not agree," Pugal said of Heidel House's new strategy. Hotels need to make a certain amount of money to cover the cost of servicing the room when it is occupied, Pugal explained. If the price for the room is less than that cost, it would be better to leave it vacant. 

After a difficult year in 2002, innkeepers are cautiously optimistic about this season, Pugal said. 

According to a report from the Wisconsin Department of Tourism, the average occupancy rate for hotels, motels, resorts and bed-and-breakfasts dropped slightly last year to 57 percent, from 58 percent in 2001. The inventory of rooms in such properties rose slightly in 2002, to 79,775, up from 78,981. 

This year, bookings are up a little, Pugal said, thanks to an increase in leisure travel. In 2002, business was down at various locations across the state because of a decline in business travel and meetings. 

The Heidel House promotes itself as a place for family reunions, and those type of gatherings have picked up, Buros said. The resort also gets meeting and conference bookings from Wisconsin and surrounding states. Even before Sept. 11, 2001, that business was slowing in 2001 along with the economy, he said. 

Sales picked up in 2002, Buros said, because the resort reacted quickly. 

"You have to go for volume," he said. "The idea is to lower the rate and increase the number of people staying with you." 

But doing that is a struggle because the resort still needs to maintain some rate integrity, Buros said. Because of the strong reputation the Heidel House has as an upscale location, most callers who respond to the new ads haven't been too bold about asking for bargain-basement rates, he said. 

When an offer is made that is too low, the Heidel House booking staff tries to sell the caller on whatever deal is available for the desired time frame, Buros said. 

Most hotels have been responding to the slow economy by advertising discounted rates, so it's hard to stand out from the pack by doing that, Buros said. 

But with the name-your-price offer, he said, "We're the first ones out there, so no one else can grab that." 

-----To see more of the Milwaukee Journal Sentinel, or to subscribe to the newspaper, go to http://www.jsonline.com. 

(c) 2003, Milwaukee Journal Sentinel. Distributed by Knight Ridder/Tribune Business News. PCLN,