Because they can. And in the end, nobody really cares.
There are several reasons why.
For example, the in-room safes which are leased by the hotel - and for which you pay the extra buck to 'insure' any contents you don't put into it if you don't notice it's there. That extra buck on the bill is going to cause you a problem with a good five to ten percent of your guests, even if you display a plaque advising them in advance of it - yet the contract with the supplier from whom the safes are leased stipulates that if a guest protests, just write off the extra dollar; and at the end of the month, send them the money you took in at the end of the month from the guests who didn't protest. They know that most people won't question the extra buck. The unhappiness of the ones who do are my problem, not theirs. Forget me -- I'm the one alienating my guests and losing repeat business, but they do well.
But some people, even at that level, want an in-room safe. So, I priced them - and you can buy them from Saflok for about five hundred bucks or so, and I don't need one in every room: I just put them in a half dozen or so, and people who want them can request them. I don't pretend to 'insure' them, I don't charge extra for them, and everyone's happy. So, why let some sleazy vendor do his black-hat marketing in my hotel, with your customers, and rake in a couple thousand a month while making the (entirely predictable) consequences of what he does my problem? One of the big items in my rulebook is, never do anything that you know or can easily anticipate is going to cause a problem or an issue with a customer. Even if you think it's something that your job requires you to do, run it by someone before you do it. Even if you can't get someone in management, run it by a co-worker and, if one or the other of you can't come up with another solution altogether, only proceed if the two of you agree and are willing to share the responsibility.
Another item in my rulebook is, don't deny the guest, or charge him for, something it shouldn't be that hard or costly to let him have. One of the reasons I formed my own company was that too many of my past jobs consisted of situations like the Econo Lodge where I was the general manager some years back, who's owner growled at me because I had ordered some toiletry items to keep behind the desk for the guests, and I'm not watching costs, and this isn't a Marriott, etc., etc. I had to explain to him, look, a guy comes in and rents a room for $79.00 per night, it won't kill us to give him a fifty-cent toothbrush if he forgot to pack one and asks for one. (Indeed, it would go over worse if we don't than if we do - and cost us any future nights the guy might have otherwise stayed if he never came back because of it, and the $79.00 in revenue that would come from each of those. So, yes, I was watching costs.)
And even if I ran more upscale properties, I'd be disinclined to charge for commonly used extras - at least without running it by the guest first and letting him or her decide - because that's just the way I'm wired, to not do things to others that drive me nuts.
Yet, with many people at that level, they won't even notice it if you give them a 'one price covers all' price, for the reasons shown. So a lot of them do it, and get away with it. And always will.
I personally don't think it makes good marketing sense. I can run an upscale hotel somewhere in the Northeast, for example, where I can charge $200 a night for most of my rooms, and include a free breakfast (cooked to order if you're willing to pay an extra ten bucks), and a certain range of amenities. You come along and, like my other guests, you're willing to pay me a couple hundred bucks a night to stay there, so everybody's happy.
But, say, I'm greedy and I want it all, so I'm going to go after the nearby Wingate Inn's customers, who cannot, or aren't willing, to pay as much. No prob: I'll just drop my room rate to $160, within their price range . . . and charge an extra twenty bucks for wi-fi . . . and charge separately for every item on the breakfast, not just individually prepared stuff . . . and charge extra for the bottled water in your room . . . and charge extra for premium channels . . and if there's a beach within fifty miles, add on a 'resort fee' . . . My newly found, reduced-room rate customers cannot, or don't like to, pay for all the extras, yet they're going to be left with pretty stark accommodations if they don't, so they might just not come back. You're getting very irritated with me for charging extra for everything -- even if it doesn't total out to much more than you were paying before -- so you might just not come back. So, I'm doing nothing but just making everybody mad and losing my customers.
One of my favorite hotel brands that came and went over the years was (compri) Hotels (http://articles.chicagotribune.c... | http://articles.latimes.com/1986... ), owned by Doubletree Hotels before that company was bought by Hilton, that launched back in the '80's. (I worked at one briefly, as a night auditor, when it expanded to Research Triangle Park, N. C.) It was an upscale brand: not only did it have a hot breakfast in the morning with eggs cooked to order, much the same as you'd find in a Hilton Garden Inn now; it had snacks in the evening served buffet-style where you could come in the evening, or as late as two or three a.m. and make yourself a peanut butter-and-jelly sandwich. (They tried to use the "PBJ" as a touchstone item, an icon to represent the brand, like the Doubletree chocolate-chip cookie, or the Four Points by Sheraton pinwheel: a picture of a peanut butter sandwich in the making showed up in all their print advertising).
(These are former (compri) hotels )
Part of an '80's trend called the 'club hotel', this hotel was made for the 'downstairs guest'. (The 'downstairs guest' is the guy who likes to use the restaurant, bar and common facilities of the hotel and enjoy himself either alone, with some company, or alone but open to the idea of meeting someone and making new friends. The 'upstairs guest' is the guy who gets comfortable in his room and relaxes there in the evening with the TV, the paper, a friend, or the phone.)
It all happened in a large, 2500-4000 foot, open-plan 'Compri Club' next to the lobby on the ground floor, where you could sit at a table, or sit at a sofa and watch a large-screen TV. Seating in the 'Compri Club' was laid out in clusters so that if you had friends over, you could put them around a dining table or a coffee table and sit on sofas or comfortable chairs; or if you were by yourself, either sit at the bar or find a comfortable living-room chair in isolated spot and have some level of privacy yet still watch the big screen TV. You could order drinks from a small cocktail bar - and the drinks from the bar were only thing you paid extra for. Everything else - the cooked-to-order breakfast, the peanut-butter-and-jelly sandwiches, etc. was included. That was how they came up with the name.
We often had to explain it to the guests. Compris is a French word which translates as 'included'. It was misspelled 'compri' in the logo to make it more unique to the brand and easier for native English speakers to pronounce correctly; and styled in lower case, and in parenthesis, to emphasize the 'everything included' point. One price paid for everything.
But in the late '80's when it rolled out, having to explain it to people was what killed it: (compri) was ahead of its time. Eventually, the brand failed, the franchisees bolted and converted their hotels to other brands, and what was left of (compri) folded into the Doubletree brand. The rooms were too pricy to sell to a mid-market customer base: you could stay at a Hampton Inn for thirty percent less. As to the people who were used to paying a more upscale price for a more upscale product, half of them didn't care about the extras, and the half who did didn't care at all whether the extras were included in the price of the room or billed separately; so they weren't impressed.
One way or the other, they were paying the same money. Whether you charged them for what many thought was an overpriced room in a select service hotel and included all the extras that they may or may not have been aware were available, or charged them a more 'realistic' price for the room, then charged them extra for all the food they ate up, the bill came out the same.
Originally appeared on Quora
(You and I don't count. While I was writing this one up, I recalled that a quarter century ago, they came up with a hotel brand that was all but made for people like you and I who go nuts with all the 'extra' charges, having to deal with people who are in the 'fee collection' business; and went overboard with my weakness for storytelling . . . If it's any consolation, I did come up with an idea for a new venture.)
There are several reasons why.
- A few years back when I was on a trip to my mother's home, my mom, who developed a liking for plush, late-model American-made luxury cars as she reached a point in life where she could afford them if she bought them slightly used, was shopping for a Cadillac or a Lincoln for herself on Cars.com, but - ever my frugal mom - going nuts because she couldn't find a model that uses regular gas. All Cadillac and Lincoln models, it appears, use premium. Every time she'd find another car on Cars.com and Edmunds that she liked, it would be the same thing: she'd look up the model and find she'd have to buy premium gas for it. She was starting to drive me and my stepfather a little nuts with it, too. I told her, Mom, a guy goes out and spends fifty to seventy-five grand to buy a brand new Caddy, he's not going to be the type to complain about having to pay an extra thirty cents a gallon on gas at three dollars and something per gallon. If he were, he'd do like I do, get a Honda, VW or Toyota for half as much that works just as well and burns regular. So, they don't bother to design them to burn regular gas. But for the last few months, the extra cost, high-test gas has been my problem. The last two years have not been my mother's best: she has been diagnosed with cancer and isn't going to be with us much longer. She has done some estate planning, cashed some insurance policies; and more recently divided up some money and property among my brother, sister and myself. In the process of getting herself down to one vehicle, she gave me one of her Cadillacs. I like Cadillacs and Town Cars but I don't have a particular preference for them like she did for the last fifteen years: quite frankly, the extra forty cents a gallon for premium gas is one of the reasons why. But I like having my mom's Caddy and am glad she thought of me. It happened just as I needed to replace a vehicle; but rather than buy one, I now have something that belonged to my mom that I should get a few more years out of after she's gone. That means more to me than the brand. So, I make my peace with the high-test gas: it's part of the price of having that car. (Late note, March 30, 2014 ) It works the same way for hotels, if you'd rather stay at a Ritz-Carlton or St. Regis rather than a Hampton Inn or a Courtyard. If you want the product, and don't care if it's a little more pricy, then you're not as likely to notice, or complain about, the extras that come with it but are priced separately. Those are part of the price.
- Speaking of cars, the wealthiest individual I know (as in, if I called him and left a message, he'd probably return my call) has a net worth of about twenty million, owns a financial services firm; and the only vehicle he owns is a three-year-old Dodge sedan, which he couldn't have paid more than $25k for if he bought it new, and I don't think he bought it new (He's the one who taught me, years ago, not to buy new cars if I could find a one-to-two-year-old one that still has some warranty left on it that I could maybe warm up to; and to try and keep them for several years, don't trade them every year or two.) Of course, both he and his wife drive look-alike Mercedes 500-series sedans. They're leased by his company (for which she also works part time), every drop of gas that's pumped into them is on a company credit card, and they get replaced every year - and both the lease payments and the fuel and service costs are written off the company's tax returns at the end of the year as business expenses. Effectively, he doesn't pay for the two cars, Uncle Sam pays for it. Why not drive the most plush, pricy, comfortable and/or well-engineered vehicle that his company can carry the lease payments on? It's a free car. If he didn't spend the money to acquire, keep and run them, and take the corporate business expense, he'd just have to turn much of it over to the IRS at the end of the year, anyway. Here again, it works the same way with hotels. People who spend their own money stay at a Days Inn or a Comfort Inn. Business travelers on expense accounts -- unless they're lower level employees who have limits on what they're allowed to spend -- stay at a Hyatt Regency. If a guy who owns his own company is doing what, by any stretch of a very creative imagination, can pass as business travel; then he's going to stay at a big box Marriott or a W Hotel - and if they charge him for Wi-Fi, bottled water left in the refrigerator, or added gratuities, he doesn't care, it's not worth making a fuss, he's not paying for it. Nor is he paying for room service. Or dinner at The Angus Barn. Or any suits he buys while he's in town because he forgot to pack one the right color. Or an escort service if he's bent that way. If he's not expensing it back to someone or something else, it's coming off his tax bill at the end of the year, and the government would just waste it on entitlement programs (if he's Republican) or the military (if he's Democrat), anyway; so forget them. If it's going to be wasted no matter what, why not waste it on something he himself can enjoy? The only reason I wouldn't do it myself is, if you have a few million invested in a Holiday Inn Express somewhere, and you have my company contracted to manage it for you, it probably wouldn't look very good to you if my management of your hotel investment was so uncaring that when I'm in town, I wouldn't stay at your hotel myself, it's not good enough for me, I'm going to stay at the Hilton instead. Nor do I suspect you would appreciate my bill from the Hilton being expensed off to your hotel!
- When I'm out having a good time, even I don't watch what I spend as carefully as I do on a day-to-day basis, in my business or even personal activities. I don't do lunch at fancy places where the check comes in at fifty bucks per person (even when I can write it off), but it doesn't look good to the girl I'm dating if I squirm about the cost when I take her out to a place like that that she particularly likes. I rationalize it as, it's not an everyday thing, it's a "just once in a while, as a treat" thing. Having what they offer be a "just once in awhile as a treat, not for everyday use" kind of thing works well for resort, spa and vacation spot locations. The bill gets paid by someone who's planned all year to spend some considerable money, and is now more likely to want to get back to the vacation, or begin the trip back home, than to question it.
- Ultimately, it happens because you - whether knowingly or not, intentionally, or not - let them get away with it. A lot of the more obvious crap that turns up on your bill can be made to disappear if you question it or dispute it (Michael Forrest Jones' answer to Why do high-end hotels insist on charging for Wi-Fi service or "resort fees"? ). And just about anything on the bill other than room, tax, any food you eat in a hotel restaurant, and bar bills from a hotel bar, can be negotiated; especially so if you use that hotel frequently, all the more so if you're established with their sales department as someone who can refer - or even better, direct - people to it. (e.g., having your staff who travels to that town stay at that hotel, or communicating to those companies in which you own much of the stock that when they're in that town, that hotel is a preferred vendor.). I'd call their sales department and see if I could get a 'one price covers all' corporate or group account with them.
For example, the in-room safes which are leased by the hotel - and for which you pay the extra buck to 'insure' any contents you don't put into it if you don't notice it's there. That extra buck on the bill is going to cause you a problem with a good five to ten percent of your guests, even if you display a plaque advising them in advance of it - yet the contract with the supplier from whom the safes are leased stipulates that if a guest protests, just write off the extra dollar; and at the end of the month, send them the money you took in at the end of the month from the guests who didn't protest. They know that most people won't question the extra buck. The unhappiness of the ones who do are my problem, not theirs. Forget me -- I'm the one alienating my guests and losing repeat business, but they do well.
But some people, even at that level, want an in-room safe. So, I priced them - and you can buy them from Saflok for about five hundred bucks or so, and I don't need one in every room: I just put them in a half dozen or so, and people who want them can request them. I don't pretend to 'insure' them, I don't charge extra for them, and everyone's happy. So, why let some sleazy vendor do his black-hat marketing in my hotel, with your customers, and rake in a couple thousand a month while making the (entirely predictable) consequences of what he does my problem? One of the big items in my rulebook is, never do anything that you know or can easily anticipate is going to cause a problem or an issue with a customer. Even if you think it's something that your job requires you to do, run it by someone before you do it. Even if you can't get someone in management, run it by a co-worker and, if one or the other of you can't come up with another solution altogether, only proceed if the two of you agree and are willing to share the responsibility.
Another item in my rulebook is, don't deny the guest, or charge him for, something it shouldn't be that hard or costly to let him have. One of the reasons I formed my own company was that too many of my past jobs consisted of situations like the Econo Lodge where I was the general manager some years back, who's owner growled at me because I had ordered some toiletry items to keep behind the desk for the guests, and I'm not watching costs, and this isn't a Marriott, etc., etc. I had to explain to him, look, a guy comes in and rents a room for $79.00 per night, it won't kill us to give him a fifty-cent toothbrush if he forgot to pack one and asks for one. (Indeed, it would go over worse if we don't than if we do - and cost us any future nights the guy might have otherwise stayed if he never came back because of it, and the $79.00 in revenue that would come from each of those. So, yes, I was watching costs.)
And even if I ran more upscale properties, I'd be disinclined to charge for commonly used extras - at least without running it by the guest first and letting him or her decide - because that's just the way I'm wired, to not do things to others that drive me nuts.
Yet, with many people at that level, they won't even notice it if you give them a 'one price covers all' price, for the reasons shown. So a lot of them do it, and get away with it. And always will.
I personally don't think it makes good marketing sense. I can run an upscale hotel somewhere in the Northeast, for example, where I can charge $200 a night for most of my rooms, and include a free breakfast (cooked to order if you're willing to pay an extra ten bucks), and a certain range of amenities. You come along and, like my other guests, you're willing to pay me a couple hundred bucks a night to stay there, so everybody's happy.
But, say, I'm greedy and I want it all, so I'm going to go after the nearby Wingate Inn's customers, who cannot, or aren't willing, to pay as much. No prob: I'll just drop my room rate to $160, within their price range . . . and charge an extra twenty bucks for wi-fi . . . and charge separately for every item on the breakfast, not just individually prepared stuff . . . and charge extra for the bottled water in your room . . . and charge extra for premium channels . . and if there's a beach within fifty miles, add on a 'resort fee' . . . My newly found, reduced-room rate customers cannot, or don't like to, pay for all the extras, yet they're going to be left with pretty stark accommodations if they don't, so they might just not come back. You're getting very irritated with me for charging extra for everything -- even if it doesn't total out to much more than you were paying before -- so you might just not come back. So, I'm doing nothing but just making everybody mad and losing my customers.
One of my favorite hotel brands that came and went over the years was (compri) Hotels (http://articles.chicagotribune.c... | http://articles.latimes.com/1986... ), owned by Doubletree Hotels before that company was bought by Hilton, that launched back in the '80's. (I worked at one briefly, as a night auditor, when it expanded to Research Triangle Park, N. C.) It was an upscale brand: not only did it have a hot breakfast in the morning with eggs cooked to order, much the same as you'd find in a Hilton Garden Inn now; it had snacks in the evening served buffet-style where you could come in the evening, or as late as two or three a.m. and make yourself a peanut butter-and-jelly sandwich. (They tried to use the "PBJ" as a touchstone item, an icon to represent the brand, like the Doubletree chocolate-chip cookie, or the Four Points by Sheraton pinwheel: a picture of a peanut butter sandwich in the making showed up in all their print advertising).
Part of an '80's trend called the 'club hotel', this hotel was made for the 'downstairs guest'. (The 'downstairs guest' is the guy who likes to use the restaurant, bar and common facilities of the hotel and enjoy himself either alone, with some company, or alone but open to the idea of meeting someone and making new friends. The 'upstairs guest' is the guy who gets comfortable in his room and relaxes there in the evening with the TV, the paper, a friend, or the phone.)
It all happened in a large, 2500-4000 foot, open-plan 'Compri Club' next to the lobby on the ground floor, where you could sit at a table, or sit at a sofa and watch a large-screen TV. Seating in the 'Compri Club' was laid out in clusters so that if you had friends over, you could put them around a dining table or a coffee table and sit on sofas or comfortable chairs; or if you were by yourself, either sit at the bar or find a comfortable living-room chair in isolated spot and have some level of privacy yet still watch the big screen TV. You could order drinks from a small cocktail bar - and the drinks from the bar were only thing you paid extra for. Everything else - the cooked-to-order breakfast, the peanut-butter-and-jelly sandwiches, etc. was included. That was how they came up with the name.
We often had to explain it to the guests. Compris is a French word which translates as 'included'. It was misspelled 'compri' in the logo to make it more unique to the brand and easier for native English speakers to pronounce correctly; and styled in lower case, and in parenthesis, to emphasize the 'everything included' point. One price paid for everything.
But in the late '80's when it rolled out, having to explain it to people was what killed it: (compri) was ahead of its time. Eventually, the brand failed, the franchisees bolted and converted their hotels to other brands, and what was left of (compri) folded into the Doubletree brand. The rooms were too pricy to sell to a mid-market customer base: you could stay at a Hampton Inn for thirty percent less. As to the people who were used to paying a more upscale price for a more upscale product, half of them didn't care about the extras, and the half who did didn't care at all whether the extras were included in the price of the room or billed separately; so they weren't impressed.
One way or the other, they were paying the same money. Whether you charged them for what many thought was an overpriced room in a select service hotel and included all the extras that they may or may not have been aware were available, or charged them a more 'realistic' price for the room, then charged them extra for all the food they ate up, the bill came out the same.
I wonder if Hilton - which acquired Doubletree some years back - would consider selling the (compri) brand. Several once-respected hotel brands that have been retired - Budgetel , and Jameson Inns , for example - have been bought from their original users or their successor companies by a franchise sales outfit down in Atlanta and 'resurrected' (at least in the sense that some older, half-star, dumpy properties that couldn't even qualify for a Knights Inn or Rodeway Inn franchise can license their names, if they're willing to pay the fees). And a little over ten years ago, even Pan Am was flying again: the name and marks had been bought - probably from a bankruptcy trustee - and over time, ended up being owned by a startup regional airline in New England. The Pan Am name and logo didn't really look right on old Dash-8 turboprop aircraft (and I don't think any two of that company's aircraft were alike: they flew whatever they could pick up secondhand somewhere), but the iconic airline brand was in the air again for a few years.
(compri)'s biggest problem was that it was ahead of it's time. There weren't enough 'downstairs guests' back in the day to really carry the 'club hotel' concept. But most of the features of it are present in the current - and currently successful - upscale select service segment; the Hilton Garden Inns, the Courtyard by Marriott, the alofts, the Wyndham Garden Hotels. As the upscale select service segment is now more well-defined, better appreciated and understood; as people can now check in to a hotel at that tier and know what they can expect, it might just work, and we'd be able to do more with it than sell franchises we can't support to nostalgia buffs (most of whom are wannabes who can't qualify for a more useful franchise, who'd just want to use it on a property that wouldn't even come even close to what a real (compri) - or Budgetel, or Jameson Inn - was back in their day . . .) Shoot, we can look right here on Quora and find people who, all together, are a large enough sample to be representative of a probable customer base for that type of product, people who want that type of product, and do not want to pay an extra ten bucks here, twenty-five bucks there, for all the extras, billed separately.
Maybe we ought to ask the folks at Hilton if they'd transfer it to us for a price that's worth doing . . . It is worthless to them at this point. Even if they tried to resurrect the (compri) brand themselves, it would be too redundant to the Hilton Garden Inn brand.
Originally appeared on Quora
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