Thursday, June 07, 2012

Another one of my rants


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.

39 comments:

Tracy Austin said...

My biggest hotel complaint is Las Vegas. No coffee service in the room, forcing you to walk through the casino (and thereby spending $) to get it. I came to spend money in your casino...please let me wake up and enjoy my coffee before I face it! (I therefore bring my own now)

Conrad Hilton said...

They do it because it can't ever hurt them. Have you honestly ever stayed in a different hotel because room service didn't charge a service fee? Or taken a different airline because the wheat thins cost less? Marketing geniuses have figured out the calculus of outrage an they know that, sadly, those things don't influence our ultimate travel choices.

Dana King said...

I don't fly unless there's no way around it; haven't for several years. I'm not afraid to fly; it's too much of a pain in the ass. So I'm picking an airline based on how much they charge for Wheat Thins. I'm driving.

Same with hotels. I never understood paying what big hotels charge for a place to read for an hour or so before I fall asleep. The Comfort Inn (to use Ken's example) has a TV and a bed and free Wi-fi. That's all I need.

Oh, and a bathroom.

Ken Levine said...

Yeah, Conrad, I won't fly United unless I absolutely have to. And I won't order room service unless I'm starving. I can't tell you how many times I've gotten dressed, gone down to a coffee shop down the street and had a bite to eat instead of just calling up for room service.

I have my own 3G plan. Never buy their internet. Never buy their movies. Never use the honor bar.

Pizzagod said...

Hotels? I was shocked that it was almost $20 a night for internet in Vegas. Hey, I'm not THAT important. I can wait to go to Big Bucks for free WiFi.

Airlines? Bite me. The flight attendants ignore anybody who's not white that is ignoring the warnings to turn off their phones or iPods/iPads/laptops, and I've never understood howcum I fly for a couple hundred and I'm sitting next to somebody probably nicer than me who paid full fare.

My first response to any suggestive sell is "Is it free?" I mean seriously, I'm in a rental car that could double as a roller skate for anybody in the NBA and you want me to pay for the CDW and for GPS? I don't think so....

Don't nickle and dime me to death. I think this all started when you'd pay $20 for a good steak dinner (when that was a lot of money for one meal) and you'd ask for Bleu Cheese dressing for your salad and the waiter would apologetically tell you it was an extra fifty cents.

I'm in the food business (tangentially-I have food stands at carnivals) and either the amenities are included or they are not-you want an extra cup or paper plate or a handful of napkins? Sure, no problem. I'm charging enough to cover it. You want double toppings on your Funnel Cake? Yeah, you're paying double. Simple as that. But you're the one who requested it, I didn't try to sneak it in on you.

The worst right now? I think it's the cable channels taking away something you've watched as a part of your basic package and bundling it up as a premium deal. I really don't need to see Man VS. Food that badly...

Johnny Walker said...

This is so true. It seems utterly absurd these days that companies like the Hilton still cling onto these things. It's a call back to the days when staying in a hotel or flying on place was something fancy and special. Now it's a necessary evil.

It's ripe for disruption, and like you say, it's already begun.

Unrelated: I noticed something the other day when I was looking at BoxOfficeMojo. When you take into account inflation, the biggest grossing films of all time are all actually pretty GOOD. There's some exceptions, but for the most part it's not dominated with Transformers or other empty CGI fests.

For the most part the highest grossing films of all time are classics with good scripts! Why don't the studios pay more attention and focus on scripts? The numbers don't lie!

All Time Box Office (Adjusted for Inflation)

Mark said...

Hotels are afraid to learn what JCPenney just found out: customers will pick the attractive lie over the simple truth every time. People think they're too smart, that they can prudently avoid running up any extra charges, thereby getting over on the hotel and feeling like they have pulled a fast one. Hotels encourage this behavior knowing that people aren't as smart or self-controlled as they like to think, and in the end the hotel will get the money somehow anyway. So what if the guests get annoyed and irritated? They don't live around here anyway.

Billy Rags said...

Why pay when you can get it for free. It's that mentality that is costing the movie studios big money now and me my little old residuals. And I hate it.

Richard J. Marcej said...

I've never understood the "need" for elaborate hotel rooms when going on vacation. When I go away on a trip I plan on doing a lot of sight seeing and enjoying the locale. All I need is a good bed, bathroom and (maybe) a TV. If I'm on vacation and spend a lot of time in the hotel room, something's wrong.

Charles H. Bryan at the Comfort Inn said...

It's not so much that there's someone at the Comfort Inn in the next room skinning a raccoon -- it's that they won't share.

People used to be better than that.

Ray said...

Just stayed at the SFO Hilton Union Square. $60 per day for PARKING!

Studio Executive #2 said...

Billy Rags, It's not that people want things for free, it's that they want to pay a reasonable price for them.

The other day I read an article on the making of a Simpsons episode. After I'd finished it, I really wanted to watch the episode I'd just read so much about.

Being fully prepared and expecting to pay for it, I Googled "watch Simpsons online".

Can you guess what results I got?

It's cheaper for the studios to fight technology (by putting pressure on politicians, using DRM, etc) than it is for them to figure out how to monetize the internet.

Why isn't the top result in my search a Fox website that allows me to pay $1 and watch an episode? Or iTunes? Or some other online channel?

And the shows that ARE available to buy online are always more expensive than their DVD counterparts, (sometimes massively so), and with none of the extras to boot.

In this day and age, consumers expect to be able to find what they want and watch it.

At the moment it's like if the way to buy TV shows was on VHS. You don't want them on VHS, you at the very least want them on DVD. But the only place you can get them on DVD is the black market.

What would you do? Try and find an old VHS machine on eBay? Or just curse the studios for their stupidity and go to the black market?

Tom Krasovic said...

Funny rant, Ken.

hb said...

Adding gratuity automatically is actually something I find convenient - IF THEY TELL YOU - there is nothing sleazier, in my opinion, then basically trying to steal money from people by having them instinctively double tip.

As a NYC resident, this trend picked up in a lot of the higher end (more like trendy) bars and restaurants in the past few years. They are 100% banking on the fact that most of the people in the establishment are drunk and won't realize they're tipping on top of a tip. That is literally stealing in my opinion and luckily I never let it get by me.

High end hotels are already so expensive, just add another $50 to the room rates an call it a day. On my honeymoon in Australia I was paying something absurd like $800 a night - but it felt great because literally everything was "free" - even knowing im technically paying for it - it still made the stay at that resort way more enjoyable then if each extra random item had a fee associated with it.

Blaze said...

It's been "caveat emptor" since money was invented. But we consumers used to only need to keep a wary eye out when we patronized places with names like "Crazy Frank's". When we could afford the higher rent district, we could at least let our guard down a bit and enjoy customer service.

Nowadays, it's bloody, open warfare on all levels. Fiendish fine print, service fees, handling charges and pre-calculated gratuities...I'm going a trip...cover me!

McLoffs said...

Included gratuities cost servers money with me because I typically tip more than the standard 15 or 18 percent.

I was recently looking at rooms in Vegas and discovered the "resort fee." which is their way of tacking $20 or $25 on to the room rate for things that should be included and/or I don't want.

Jeffrey Mark said...

I once traveled quite a bit on business. Had to be in Reno a week. Stayed at a nice, humble Best Western waaaay outta the downtown gambling mess. I still remember the nice room - had a beautiful artrium on one side of the room to look out on - beautiful trees all around. Only paid - back in 1996 - $50 a night, or something close. Could have stayed in a big gambling casino hotel-schmotel, but I don't gamble, and all of the luxury crap they try and fool you with is worthless. I never wanted to stay at big high-rise luxury hotels when I traveled...all of the help are phony-balonies trying so hard to be "nice" so that you will spend more of your money for nothing, or make you think you're just too important that you can afford to stay in their joint. I always enjoyed nice stays at Best Westerns wherever I traveled and was treated well...without all of the phony-baloney b.s. from "tony" hotel staff. Yeah, all y'all need is a comfortable bed and a clean bathroom. Period. A real, good people running the place, who don't dumb/talk down to you.

Anonymous said...

I agree, as another person that recently spent some time in Vegas (Bon Appetit Food Festival!!) I was rather surprised that the high-end, thankfully, casino-free hotel I was staying at tacked on a golden access fee which included wi-fi, gym access, and some other knick-knacks for $24/day. Really? As Ken pointed out the Courtyard Marriott I stayed at last month gave me all that for the price of the room.

As Ken also pointed out, I don't fly unless I absolutely have too because of the ridiculous added fees. If I can't drive, I check the train first and car rentals before I even consider trying an airline.

McAlvie said...

Yeah, I don't think they even make that much on the convenience bars, either, because most people do know better. And even expense accounts to explain it, since these days expenses are scrutinized by companies a lot more than they used to be.

And the wifi fee in high end hotels is just stupid. Frankly, for the price of a high end hotel room, you can get a room at an extended stay chain and be much more comfortable when you watch tv. And they usually have a fridge and microwave.

And I think travellers are becoming more savvy to this stuff. I predict we'll see hotels either dropping those fees or upping the amenities to make the rates more attractive. A jacuzzi in every room or something.

chuckcd said...

It's any wonder that American businesses are going in the toilet.
Why is our economy tanking?
I think Ken has found the reason.
I fly once every 2 years only because I have to.

Breadbaker said...

Ah, but you haven't mentioned the latest and greatest "honor bar" scam, the electronic honor bar that charges you for stuff you move around. Seriously.

For years, I'd move stuff I had no intention of eating or drinking around or out of the refrigerator so that I could chill a bottle of Diet Dr Pepper or the leftover wings from the deli down the street. Now, if you so much as touch the stuff, you're charged for it. Yes, you can go and prove to them that that Kit-Kat bar is in fact still there, but that's time and effort and let's face it, intended to discourage you by expecting you'll be humiliated into it.

I wonder what happens in an earthquake?

diane said...

Off topic, but I had to put in a word for your book. I am thoroughly enjoying it! People, you really need to buy the book. And, I'm not getting paid to say this. It's a great read.

John said...

Hilton's bottom-line chain, Hampton Inn, offers free wifi, and then, as you go up in levels through the Garden Inn, Embassy Suites, etc., up to the Waldorf level, the wifi and incidental charges seem to rise (which actually may make sense in a "If you're staying here you can afford the charges" sort of way, but it is weird they'd hack off the people spending the $200-$500 a night rates over trivial things while not trying to nickel-and-dime the $75-$200 guests to death).

MikeBo said...

Totally enjoyed your rant, Ken. One of the major reasons that teleconferencing is growing in popularity, apart from the obvious budget squeezes is the number of Bullshit charges tacked on by Airlines, hotels, car rental agencies etc.
PS: I know I'm not a robot,but I have a heck of a time trying to read your security code words. I can understand Roger Simon needing that kind of security, but Ken Levine, my hero?

Anonymous said...

I was going to complain about being charged $45 a day at The Four Seasons Half Moon Bay, but $60 at The SFO Hilton is really outrageous. Always bring our own booz, soft drinks and snacks to even the most high end hotel and store them in their "hold-up" mini bars.

YEKIMI said...

The biggest scammers have to be the A-holes at Ticketmaster...excuse me, TicketBASTARDS. I used to go to concerts even though the added "convenience" fees ticked me off. Last concert I was planning to go to, they had added a new "conveinience" fee....a $20 parking garage fee, whether you planned to use the facility's garage or not. With that fee and all the others it DOUBLED the cost of the actual ticket. That was the final straw for me so I no longer go to see any groups or artists play as much as I would like to, thanks to Ticketbastards! I can't even hit up friends at radio stations anymore for freebies because they have all been downsized and I don't know the voicetrackers piped in from elsewhere!

JT Anthony said...

There's a good article in the WSJ today about the airlines and how much it takes to cover all the fixed costs associated with flying. Unfortunately, it's not going to get better anytime soon with high fuel prices and expensive legacy pension plans.

Tim W. said...

I recently rented a car in England and my wife decided that it would be nice to rent GPS. I emailed them and was told it would be 80£. I worked out then exchange rate and declined the option. I then realized I needed booster seats for the kids. to which I was told it would be 60£ each. Not baby car seats, but the backless booster seats. I found they sold booster seats at a department store near the car rental place for 20£ each. So I declined the option and plan on buying the seats myself for the 8 days I have the car.

Had they cut the price of each in half, I would have rented both. As it is, I'm not renting either.

I'd say they lost money.

Pat Reeder said...

I once drove cross-country and stayed wherever I could find a room when I got tired. That meant I stayed in everything from a couple of really nice hotels to a few absolute dumps. Surprisingly, the best place on the entire trip was a Super 8 Motel somewhere in Tennessee, I think. The room was bigger than I got in the best hotel, clean, well-appointed, big bathroom with a large tub and shower enclosure, plus a laundry room, snack vending machines and a dining area with free continental breakfast. Back then, I think that set me back about 32 bucks, so it's been a while. But when I'm driving, I now look for Super 8 motels.

BTW, I also found that when vacationing, you can sometimes get better deals at a bed and breakfast than at a luxury hotel. We go to Galveston every summer, where a huge suite in a gorgeous Victorian mansion, complete with free wi-fi, private veranda, gourmet breakfast and the owner's home-baked cookies every evening, sets me back about $50 a night less than a cramped hotel room downtown would. You have to book well in advance, but it's worth it.

Tom Galloway said...

Re: Internet. I've read that one reason for the high charges is that hotels made deals fairly early for access, back when it did cost a fair amount more, and are stuck with said deals. Would seem it'd get better over time though.

Re: Resort fees. Supposedly these can be argued off as if they were truly mandatory, they'd be part of the (taxable) room rate, so long as you don't use the services. My impression, as a resident of Vegas at the time, is that they became prevalent among all but Harrah/Caesar's hotels back when the recession and overbuilding had sunk rates at even the top hotels to ridiculously low levels...and the gambling was making up for it (I recall going into the Bellagio one weekday evening and thinking there weren't even 100 people in the casino). Again, they've not removed them now that things are better; in fact MGM seems to be raising them.

The fees that really get me though, for both hotels and especially rental cars, aren't imposed by the companies, but rather the taxes imposed by the governments. Try renting a car for a day or three from an airport location, and it's even money if the the taxes and government/airport fees won't exceed the rental car rate. Ditto for 12 to 20% hotel "occupancy taxes", which greatly exceed local sales taxes. Although as an article I read today about new hotels in Palo Alto pointed out, PA gets all 12% of the (local) hotel tax, while it only gets 1% of the sales tax, the rest of which goes to the state or county.

But the whole thing about such excessive hotel and rental car taxes that gets me is that they're specifically aimed at people who are not residents of the area. And thus don't have any means of being represented in the local government. Didn't we do that whole revolution thing about taxation without representation?

Tom Galloway said...

Oops. In the above that should've been "and the gambling *wasn't* making up for it", not "was".

sanford said...

Speaking of phone charges. A few weeks ago Tony Kornheiser stayed at a hotel he wouldn't name. His celll phone wouldn't work for some reason. The hotel was willing to switch rooms, but he made a deal he would stay in the room if they didn't charge him for phone calls. he made between 5 and 7 calls lasting about 13 minutes total. His charge was 199 dollars. He did get it straightened out so he didn't have to pay, but that is ridiculous.

Johnny Walker said...

Only the reoccurring topic of the same plot lines appearing in several shows, I've just come across one to add to the list:

In Cheers Season 4 there's an episode where Sam lends some money to Diane. Slowly but surely, Sam starts to feel Diane has taken advantage of him, spending her money on frivolous things, instead of paying him back.

A very similar story appeared in, of all shows, Frasier! Where Frasier lends Daphne some money, and eventually confronts her when he thinks she's wasted it.

Both shows feature scenes where the lender sees the lendee sporting new luxury items, and getting worked up over it.

Breadbaker said...

A lot of those hotel taxes are the ways in which stadia and arenas are financed, the thinking being that only "outsiders" would pay the taxes so that meant that the stadium was free.

Right.

HogsAteMySister said...

I hate being a cheapo.

My Chinese relatives LIVE to be cheapo's, but it embarrasses me.

But my dislike of being cheated - nay, screwed -- by hidden charges has led to some one-man jihads of late.

The good thing about jihads is, when aimed at, for example, McDonald's, you get $20 in vouchers in the mail.

The bad thing when you jihad against a stupid cheater company like Starbucks, is that they do not even respond.

I cannot keep up with the companies and actors that I am boycotting. But, since they don't let you pack in New Zealand, boycotting is the best I've got.

Except for the occasional Ugly American tirade. I try to keep them to a minimum. My BP is high enough as it is...

Knuckles said...

I try to only stay in Kimpton hotels. They bend over backwards for you from a customer service perspective, free wi-fi (that you can actually use pretty much any time at any Kimpton whether you're staying there or not, so long as you have one of their loyalty accounts) and they've got great rooms. No, I don't work for them, I've just come to love them from regular business travel.

jcs said...

Ken,

I think you might have overlooked one of the main culprits: shortsighted consumer behaviour. Some products are only sold by price these days, airline tickets are one of them. Nobody pays attention to safety records, comfy seats or high quality snacks. If people can save just one dollar/euro, they will, regardless of the consequences. Due to this the companies have to sell their product as low as possible - and sometimes even lower than that. This creates the need to make money elsewhere. - But yes, hotel chains have been overcharging for services for many years.

Little Miss Smoke and Mirrors said...

The last time I flew, three years ago, I had to pay extra fees both for aisle seats and for luggage. My flight out of LAX was delayed 3 hours which fucked up my connection in Detroit to a small airport that had no more connections that day. My rental car was reserved at the small airport, but now I had to rent out of Detroit to drive the 200 additional miles I was originally flying. Of course, it was a holiday weekend, so there were NO rental cars. I FINALLY found one on the 7th or 8th call, and they charged me a premium price because I was desperate. The nightmares kept stacking up. I declared I was on a hiatus from flying and have taken all my vacations since locally. I live in So Cal, so it's no skin off my nose, there are a million things to do within an hour or two's drive.

John said...

(1) Sidenote on recurring plot lines - the borrowed money was used in BBT with Penny borrowing money from Sheldon with a twist. Sheldon didn't care when she paid him back, but it ate at her.

(2) Just got back from a cruise. If you want to see addons and upsells, that is it. Casino, gift shops, bingo, photographs, drinks, excursions. The food is free, but there is still a "better" restaurant for just a bit more money. They too are about to turn me off. I am getting to the point where I won't do it all anymore. I will just buy the ticket and enjoy the weather and food and general service.

(3) Sorry about the anonymous posts - my droid gets rid of my name when I submit the recaptcha BS.