Interesting article in USA TODAY this week (they’re more than just pie charts y’know) about all the hidden travel expenses that hotels, airlines, and rental car firms slip in. They think they’re being clever. What the article doesn’t say is this: How much are they all losing on good will and repeat customers?
Let’s look at hotels. Ever check the prices in honor bars? Four mini-Oreos: $19. A little tin of cashews: Your monthly car payment. Should you be desperate enough to buy anything you’ll notice it’s stale because that same package of Oreos has probably been there for six months. I’m reminded of NBA goofball, Benoit Benjamin. It’s his rookie season. He goes on the team’s first road trip. He stays at a nice hotel. He sees the honor bar – all the food and little liquor bottles, and thinks “Wow, what great free stuff!” So he empties it all into his suitcase and off he merrily goes. The team gets a bill for $3000.
The point is: people who aren’t as clueless as Benoit Benjamin recognize that the hotels are taking advantage of them. And they resent it. So when hotels (and airlines and car rental companies) cry that they’re not making enough profit, the public says “We’ll sell you a Kleenex for $30.”
Room service. In addition to inflated prices for the always mediocre/always cold/always soggy food, some hotels also slip in a service charge and gratuity. What’s the difference between the two? And most hotels don’t tell you gratuity is included so many customers add on yet another tip. When they realize this, no amount of free little bottles of conditioner will appease them.
Happy to say though that hotels are now getting hoisted on their own petards. Dollar charges to use the phone? Gonesky. We all have our own phones. Some hotels charge $12-$20 a day for internet service. Screw that. Many people have their own 3G plans. If the hotels charged $2 a day we might say, sure, for the high speed and convenience. But $12 when you can get the same plan for a month? Even the Kardashians know better (well, Khloe maybe). So instead of maybe 50 guests paying $2 a night, they get two paying $12. I’d do the math for them not without a service charge. And maybe an activity fee.
The Golden Globes are held in the Beverly Hilton. Hundreds of media types cover it. So for that one night the hotel used to charge literally hundreds of dollars for one-day internet access, knowing the journalists needed to be on-line. Think of it. HUNDREDS of dollars. For Wifi. Radio waves. Today they’d be lucky to get ten bucks from the entire press corps. And I say to the Beverly Hilton “Join my network – KISSMYASS.”
In-room movies used to be a huge cash cow for hotels. But they charge as much for one semi-recent Adam Sandler leadburger as Netflix charges a month for everything. So now we watch movies we’ve downloaded or get streaming while in the room. And the porn we can access is hard-core. No more paying good money and not getting the money shots.
Ironically, it’s the high-end hotels that do most of the gouging. Go to a Comfort Inn and the internet is free along with a continental breakfast. There's someone skinning a raccoon in the next room but still. The USA TODAY article said a guest at a W. wanted six drinking glasses brought up to the room and the hotel wanted to charge $1.50 a glass.
The high-end hotels feel they can get away with this nonsense because of business expense accounts. And in that regard I have mixed feelings. When someone from Time-Warner gets outrageously overcharged by the Beverly Hilton, whose side are you on?
Airlines charge ridiculous prices for food. All that has accomplished is pissing off travelers and boosting the business of every airport Burger King. Yes, that Double-Whopper is going to close up an artery but it still costs less than an American Airlines snack pack which contains three Wheat Thins and a morsel of cheese.
Airlines will quote you one price for economy class but then when you book (on line because they charge you to speak to an actual person sitting in Tulie, Greenland) you find all the decent seats cost extra. An aisle is an upgrade these days. How many times over the last few years have you thought about going somewhere but decided the air travel was just too expensive and the hassle too great so you bagged it?
Advertisers now only go after younger demographics. Why? Because their contention is younger people are just starting to establish brand preferences. Us old crones (35 up) are set in our ways. We’ll never change toothpaste brands again, even if a new one comes along that actually cleans teeth. Obviously, Corporate America places a very high value on brand identification.
So why screw it up by being so blatantly greedy that you chase customers away? You spend billions to advertise and lose a potential life-long customer because you charge for drinking glasses? Is this good business sense?
Adding hidden expenses and inflating prices are practices that is backfiring. Yes, I know profit margins are less and these mega-conglomerates have to be creative in finding new streams of revenue. But give us something for what you’re charging.
This is my concluding message to hotels, airlines, and any big business looking to slip things by us: Beware! There is a Napster out there with your name on it.
Thursday, June 07, 2012
By Ken Levine at 6:00 AM