Sheraton to give thousands of customers a free room for the night

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With jobs, paychecks, and disposable income evaporating across the country, business is tough all over. However, the last year has been devastating for the hospitality industry, as consumers cutting back on luxuries have been quick to reduce or eliminate their vacation budgets. According to a recent study by PricewaterhouseCoopers, lodging revenue is on track to drop by 16.1 percent in 2009 and will flatline in 2010. Meanwhile, the consulting company predicts that 2009 residency rates are hovering around 55.5 percent, and will edge slightly upward to 56.1 percent in 2010.

Sheraton thinks that it might have found the secret to filling rooms. From October 6 through 9, the company will conduct the "Check-In On Us" giveaway, offering entrants a chance to spend a night for free at one of its 86 new or newly-renovated hotels. The 2,100 winners will get to spend October 23 sleeping in what Sheraton hopes will be immeasurable comfort with no strings attached: the hotel chain will cover all taxes and fees, although patrons who use extra services or stay for more than one night will have to pay for their expenses.
Sheraton, which is owned by Starwood Hotels & Resorts (HOT), isn't the first company to give away free hotel rooms. Chains from Holiday Inn to Comfort Inns and resorts ranging from Wyndham to Club Med allow kids to stay for free. For that matter, "comped" rooms have long since been the holy grail of Las Vegas vacationers hoping that their losses at the table will translate into free lodging, free drinks and cheap prime rib. However, the short-term nature of Sheraton's promotion, combined with the fact that it isn't attached to any other services, makes it unique.

"Check-In On Us" is, effectively, a coming-out party for the chain. While most hotels have experienced difficulties over the past year and a half, things have been especially hard for Sheraton. Even before the recession, the chain was gaining a reputation for inconsistent quality, with facilities that were often run-down or out-of-date. Beginning in 2007, Sheraton has undergone a massive $6 billion renovation, aimed at updating its look and rescuing its reputation. Now, two years later, it is using the October 23 promotion as an opportunity to show customers how much it has changed.

It remains to be seen if Sheraton's renovations and promotions will accomplish its stated goal of pushing the chain into competition with Hilton and Marriott. Regardless, it should give the company an opportunity to impress customers with its extensive -- and expensive -- attempt at rebranding. In the process, it will also give more than 2,000 happy customers a chance at a short vacation in a time when leisure has become a luxury that few can afford.

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