The Relationship Between Hotel Quality and Cost.

I used to be a Starwood Hotels guy, but then I realized something about hotels.  

Justin's law of hotel value:  Once a set of fundamental requirements of a hotel room are met, there is a nonlinear relationship between a hotel's room rate and the total cost of the hotel stay.  

Huh?  Stay with me, here.

Basically, if you have a room at a cheap hotel, you'll have a cheap stay, but if you have a more expensive room at a nice hotel, you'll have a FAR more expensive stay, compared to an identical stay at the cheap hotel. 

Huh?

Here it is:  Once you have the basic essentials of a hotel, like a bed, TV, private bathroom, etc., you've got a baseline price for a hotel room in a given market.  If you can find a hotel room at the basic cost  "threshold" for a given market, you'll find that it includes more amenities that you might WANT for free.  The more expensive a hotel room gets, the more you have to PAY for amenities that are otherwise free at hotels closer to the basic cost threshold.  

Take, for example, any given Quality Inn.  It's a relatively inexpensive hotel room, in the grand scheme of things.  You're not expecting a flat screen in every room, or a lavish pool necessarily.  You'll expect the basics of a hotel; bed, bath, TV.  Now, Quality Inn will generally include a free breakfast, frequently a hot breakfast, free wi-fi, free small business center, free use of fax, etc.  Nothing extravagant, but note the common term, "free."  So your total hotel stay will be in line with the room rate times the number of nights.

Now, take for example, any given Marriott.  It's not extravagant, but it's a "nice" hotel.  You're going to pay significantly more for a Marriott room in a given market over a Quality Inn.  What do you expect?  A nice bed, a nice bathroom, and a nice TV.  The Marriott, though, will include, breakfast for a fee, usually a hot breakfast, wi-fi for a fee, business center for a fee, use of fax for a fee... see where I'm going with this?  Why is the hotel 20%-50% more than what I call a "threshold" hotel, but the SAME services are free at the "threshold" hotel and cost money at the "premium" hotel?  While the hotel should cost 20%-50% more, based on the room rate, it doesn't.  It will cost far more for the same stay, because you'll pay the additional 20%-50% for the room rate, PLUS the additional $20-$50/night for the same amenities.  Hence the nonlinearity.  And it only gets worse as the hotels get nicer.  

This is what Justin's law of hotel value is all about.  As the hotel rooms cost more, the total cost of the stay diverges as the price of the hotel room increases.  "Cheap" hotels remain cheap with the cost of the room, but expensive hotels become more and more expensive as the cost of the room increases.

So today, I'm a Choice Hotels guy.  I have been for a handful of years now.  The Choice Hotels program provides great benefits at a wide variety of hotels.  More importantly, though, the cost of the rooms is generally around the "threshold" price, keeping the total cost of the stay reasonable. 

Here's my recommendation, then.  If you want a nice room, book the nicest room in the cheapest hotel that HAS the amenities that you want, and they're more likely to be free and/or cheap, than if you book the cheapest room in the nicer hotel that has the amenities.  If you want a pool, clearly you have to go where the pool is, but book the CHEAPEST place with a pool, and then get the nicest room you can, for a treat.  The folks behind the counter will see you're the big fish in the little pond, and take care of you accordingly.  If you're the smallest fish in the biggest pond, you're more likely to get the "how nice that you decided to play at the $2 table at Ceasar's Palace" look.  

Campaign statistics.

I received a campaign flyer from Barack Obama.  

It contained a statement that Obama would reduce the taxes of middle-class Americans by $1000.

I would like to see the specific plan that will provide health care for all Americans, but will reduce middle-class taxes by $1000.  

If anyone has any specifics on this plan, I would like to see it.  Thanks.

Is bailing Fannie and Freddie out a good idea?

I'm a fiscal conservative.  I like small government.  I like low taxes.  I like relying on myself for the things I need.  For that matter, I like to be able to make my own decisions on what I need and don't need.  I don't like bailouts.  

All that being said, there is a time when the Government has an obligation to intervene in the affairs of the commercial world.  The Fed attempted to fix the problems brought on by the market crash in the 20s, and failed (albeit, they just didn't try hard enough, but I digress).  The Government stepped in an produced jobs and welfare programs to drive the economy from the bottom up.  The same Fed had Chernobyl-type problems with inflation in the late 70s, which, depending on how one defines "victory," the Fed was victorious over.  

What good would the collapse of Fannie and Freddie do?  The liquidity required to fund mortgages would go away.  The credit necessary to buy houses would nearly vanish.  All this would further exacerbate the problems of the housing market, as there would be no buyers for defaulted homes and homes that were "forced" onto the market (imagine a job change or a responsible buyer trying to pro-actively buy into a smaller, more affordable home).  When credit tightens, people can't buy cars, 

In the case of Freddie Mac and Fannie Mae, the fact is that the collapse of these lending giants would not benefit any market.  Other banks already don't have the free capital to buy the companies.  Hell, the Government decided it couldn't even afford to buy the companies, so they simply nationalized them.  The simple fact is that the investors that provided the capital to support the loans, are also the capital owners that drive our economy through investments elsewhere.  Furthermore, investors that are petrified to loan money to homebuyers will only cripple our real estate market.  These investors will take their lumps; Lord knows that once the Government begins RUNNING Fannie and Freddie, those financially tethered to the company will not see any kinds of returns that they might hope to see were they run by competent, profit-driven executives.

The real key is getting the Government to declare "victory" early and getting out of the business of running companies.  This is not the kind of situation that "more oversight" is going to help. We don't need additional bureaucrats looking into the lending process forever.  Economic models might help predict the behavior of these kinds of collapses in the future, but there's no gaurantee, and if these models are put solely in the hands of bureaucrats, the process by which the legislation and regulation of the lending markets are controlled will be bastardized and perverted by the politics of the institution from which it derives its authority.  Presidents will have more authority to impress the short-term economy to provide constituents with desired results, and this will come at the cost of further mortgaging our future.  Inevitably, another collapse will come, and instead of blaming greedy executives and faceless corporations, we will find ourselves, once again, disappointed with the Authority to which we yielded our independence. 

What is necessary in this situation, is for the Feds to get involved, make sure everyone involved takes their lumps (stockholders, execs, and borrowers), and then get out, leaving everyone with the lasting knowledge that if you're not careful, you will take your lumps again.  Lenders shouldn't have been making these loans.  Many of them will go bankrupt, and their stockholders will pay.  Borrowers shouldn't have been so anxious to sign up for loans which, with their own honest personal assessments, they could not realistically repay.  Some of them have gotten in over their head, and several of them will likely default, and they should.  Investors should have been more shrewd with their money, looking for legitimate long-term investments (which real-estate has traditionally been) and performing due dilligence on their beneficiaries.  Some of the bonds they purchased should default, and likely will.  Allowing each group, in turn, to pay appropriately, for their own greed, while maintaining the stability and provided liquidity which Fannie and Freddie provide for the housing market is a good first step toward healing the real estate market, both short and long term.  

It doesn't have to be just a Government handout. By propping up the market in the short term until liquidity and stability can be naturally achieved within the open market,  it can (and should) be an investment in the American economy.

Rush Limbaugh's ego is ridiculous.

This week, I had the pleasure hearing a portion of the Rush Limbaugh Radio Show. I have been exposed to Rush since I was reasonably young, as the father of my best friend growing up was a devout fan. I suspect he still is.

I hear snippets of the show every now and then, but I have yet to hear anything particularly enlightening come out of his mouth.

I'll give you two examples.

On 24 Feb, Richard Branson had a 747 flown from London to Amsterdam with one engine powered by coconut/fuel mixture. It was a demonstration of biofuel viability in commercial airliners. For the complete story, check here. Rush, authoring "Why We Can't Accept the Premise of the Liberal Global Warming Hoax," decided to provide his listeners with some thoughts on the use of coconut biofuels in commercial jetliners.

..."do you realize how ridiculous this is? Do you know what happens to coconut oil? At room temperature, it will solidify. I know, because I've got gazillion packets of it with popcorn that I use in my theatre. Coconut oil will solidify! You cannot put it in a jet fuel tank, especially at high altitude. It will freeze."

Thank you, Dr. Science. I'm sure the engineers at Boeing would like to know what will and will not work with their engines. I'm sure they would also appreciate it if you bound your thoughts in "reality." Yes, coconut oil you use with the popcorn in your theatre is solid at room temperature. (You have no idea how hard I am trying to avoid the obvious weight observation here...) Coconut oil is liquid above 76 degrees F. Last time I checked, however, jet engines don't run at 76 degrees F. They run someplace significantly higher, I suspect, depending on the design and type. Interestingly, even at "freezing" temperatures, nearing 550 mph at 35,000 feet, coconut oil could be maintained as a liquid.

As a point of interest, I specialized in rotating machinery, specifically jet engines, in college. Maybe that's just bragging, but it seemed pertinent.

It's not so much that Rush is wrong. It's that he claims to be an authority on anything and everything. "I now know what George Washington felt like." Somehow I think the struggles George Washington faced during the Revolutionary War, were significantly different, if not significantly more life-threatening, than the trials Rush faces on a daily basis. Although, perception being reality, Rush DID say that "the Revolutionary War was nothing," during his comparison of his conservative campaign relative to Washington in Valley Forge.

From conservative politics down to idea of burning coconut-kerosene fuel mixtures in jet airplanes, Rush claims to have definitive answers. Not opinions. Answers.

It's frustrating to me how conservatives allow this kind of arrogance define such a significant portion of the republican base.

Sex, drugs, and guns.

If you've read my blog for long, you'll not be surprised at my concerns regarding primary education within the U.S.

However, something that I think is well on the path to helping young people grow up is sexual education. Educating children (not too young, and no, I don't know what "too young" is) on the risks of having sex, and how to protect themselves, and the context in which sex is universally appropriate is an honorable endeavor. I think it makes tremendous sense for this to be taught in school where general information and context can be delivered uniformly to students. However, and I think most parents would agree (I will be the first to point out that I am NOT a parent,) sex education might be a part of primary education, but should be partnered with the individual context, morality, and communication of the parents. Schools probably shouldn't be involved in the "pre-marital vs. post-marital vs. extramarital," discussion, but can provide fact-based discussions of threats, risks, concerns, and protection about sexual relations.

The same thing goes for drug education. Warning children of the threat the drugs pose to our society as a whole, but also to individuals that partake in the drug culture is an appropriate venture for schools to take part in. However, like sex, it is up to parents to couple discussions and communications with the lessons in school to provide context on the individual morality associated with the values of the core family. Some values see drugs as a moral issue, others see them as a social issue. Providing that context probably shouldn't be done globally by the school, but by the parents, and reinforced by global, fact-based lessons, by the school.

So... how is it that guns don't fall into this category? It seems to me the topic fits snugly into the drugs and sex contexts. Schools could provide fact-based information on the threats, risks, and benefits of guns. Parents, however, can provide the core value context and morality of guns, gun control, and gun value to the children through open communications, much the same way this can (and probably should) be done with sex and drugs.

I believe that gun education at a young age is a start to helping folks at the most risk for abusing firearms, the same way we use education to promote (not abolish) safe sex and drug avoidance.

I would speculate that guns are a bigger threat in inner cities and suburbs, where children are not exposed to positive gun experiences and lessons at a young age (even if you normalize the data for population disparities). Truly, I would suspect that most inner city children are exposed to guns through either a negative source (someone "bad" that has guns locally, someone friendly being killed by guns) or through video games which glorify the use of guns as killing/vindication tools. However, in more rural areas, children are exposed to guns at a much younger age, and with positive connotations. Guns are to be respected. Guns are tools, not weapons. Guns are not to be mishandled.

I learned how to shoot a rifle (BB gun) when I was 3. I have a strong respect for what guns can do, and how they should be handled/treated. To this day, I do not shoot often. I own a small handful of guns, but they are on my grandfather's farm several hundreds of miles away. I have no desire to own a gun in my house, not because I'm "anti-gun," or because I don't like guns, but because I view them as a liability in my home. Why should I have a gun in my home? If someone were to break in, there's nothing in my house (aside from my wife) that I would be willing to kill for. And I have learned that if you're going to point a gun at something, you better be willing to shoot it, and if that something is a person, you better shoot to kill. That's not a responsibility I want in my home. I don't even like having the responsibility of taking out the trash! So I choose not to have a gun. I'm guessing that rationale does not go through the head of the street thug in downtown Detroit.

However, I believe the vast majority of "anti-gun" lobbyists/activists, have never been to a gun education course. They have never fired a rifle and handgun. They do not know what it means to "respect" a gun. They know what it means to avoid guns.

When guns are outlawed, only outlaws have guns. It's not about making guns go away. It's about making sure that only responsible, trained, educated people have guns in appropriate situations.

Food Lion-Chinese Connection

Several weeks ago I was driving from Washington, D.C. to Charlotte, NC. I was driving leisurely down Rt. 29, when I decided I wanted some food. I had been feeling kind of nauseated the last couple days, so I decided to get something bland. What I REALLY wanted was some plain white rice; warm, bland, and tasty with a little salt and pepper. Knowing that Chinese food permeates every culture in the world (I believe you can find Chinese food in some of the more 3rd world countries in Africa), I figured even in the desolate Bible-belt north of Danville, VA, I would eventually come upon a Chinese restaurant.

Well, I did. I went inside, and ordered one large order of plain, white rice. $2.35 and a pitstop later, I was I getting back into my car. I noticed directly across the street, in the middle of nowhere, there was a Food Lion. I thought to myself, "Trusty Food Lion, serving the desolate and destitute of the Southeast."

It was at that point that I realized I couldn't recall the last time I had seen a Food Lion without a Chinese restaurant in the same or adjacent shopping center. As I continued my drive, I decided to look for Food Lions, and as I found them, look for a Chinese restaurant nearby. Sure enough, I found several Food Lions as I drove through the hinterlands of Virginia's Piedmont, and in most cases, there was a Chinese restaurant in the same shopping center. If not in the same shopping center, then right across the street in another shopping center.

When I got home, I decided to do a little research, which you can find HERE. I went to several different geographic areas within Virginia and North Carolina, and Googled Food Lions and Harris Teeters. I then Googled to find the nearest Chinese restaurant to each. I used Google-maps to find the distance between the two. I tried to pick areas of varying population density, to check different socio-economic microcosms within the grocery store markets.

What I found was that the average distance between a Food Lion and a Chinese restaurant was 801 ft., while the average distance between a Harris Teeter is 6846 ft; over 8 times further than for Food Lion.

What's up with that?

At first I thought, "Well, Harris Teeter and Food Lion target slightly different markets." I assumed that Food Lion was targeting a rural poorer demographic than Harris Teeter. After a little more empirical thought, however, I don't see how that's relavant. First, Harris Teeter, targeting a richer demographic would put it in more populated areas. However, even the Harris Teeter in Martinsville, VA (which, aside from the race track, is no bustling metropolis) is almost 2 miles from the nearest Chinese restaurant. Conversely, the Food Lion in Fair Lakes (,which has since been converted to a Bloom - Food Lion's "Cadillac" of stores, Fair Lakes being a solid upper-middle class area) is only 141 feet from the nearest Chinese restaurant. So clearly I don't know who the target demographic is for each chain.

Then I thought, "Well, maybe the Chinese restaurants target the same demographics as the Food Lions." By that logic, however, there should be Food Lions in Africa, per my previous statement. I know, I know... that logic is just stupid. But seriously, if you look, you will find the density of Chinese restaurants to Food Lions much higher in any region where Food Lion is active. Each Chinese restaurant cannot service as many patrons as the Food Lion can. The same is true for Harris Teeter, too, actually, but the geographic proximity of the Harris Teeter to the nearest Chinese restaurant is clearly much higher for Harris Teeters.
In all honesty, it might be interesting to see the square footage of the establishment vs. the square mileage of the service area for each establishment for Harris Teeter, Food Lion, and "Chinese restaurants."

I can only think of one more thing; Chinese restaurants, by virtue of their Asian heritage, find it good luck to be located near the "Food Lion," Lions being mythical protective icons in Chinese culture, and having clearly even MORE protective influence with their "Food" influence. How could a Chinese restaurant proprietor NOT put his establishment in the protection of the "Food Lion?"

Car Rental Fees

I rented a car this weekend because my wife's family was in town.  We needed something that could carry 6 of us, and we only have two Corollas, so we rented a minivan. 

I rent cars a lot when I travel (although not always).  I have noticed there are a lot of fees, but today, since I was personally responsible for the cost, I looked, I mean REALLY looked at the fees.  This is what my receipt looked like.

Base Rate $120.00

$4.28/day fee $8.56

11.11% fee $13.44

FTP SR$0.50DY $1.00

Taxable subtotal $143.00

Tax 8.000% $11.44

*8% Surcharge $10.68

Total $165.12

So, my base rate was $120.00, but the cost to me was $165.12.  That's $45.12 in fees, or 38% of the base fee!  What the hell is a 11.11% fee?  It's like a phone company stacking on hidden fees until you don't even know what you're paying for!!!

Couldn't the $4.28/day fee be factored into my base rate?

If this is "standard" on every rental, shouldn't the rentals simply BE 11.11% higher? 

What the hell is an FTP charge?  It's only $0.50/day, but it's not clear at all what the $1.00 is for.

And why isn't the 8% tax rate ($11.44.) the same as the 8% surcharge ($10.68)?!?!?  It seems like 8% is 8%, so shouldn't they be the same?  

I won't boycott Avis on this, simply because they do treat me well, and I think $160 for two days with a nice minivan (Chrysler Town and Country) isn't a terrible deal.  It's just that it seems misleading to quote one price as the base price, and then add so many fees that the base price isn't even recognizable.  

In the future, I may just ask to borrow a friend's car, though.