One Mile at a Time says that one major hotel chain is considering a ‘coronavirus surcharge’, a price added onto the room rate because of the high cost of cleaning and social distancing.
There are several problems with this idea.
- Surcharges are meant to trick consumers. They show lower rates when comparing pricing against other hotels and chains, but click through and there’s a higher total cost.
- Hotels need trust now more than ever. We need to trust that they’re going to be disinfecting properly, that hotel housekeepers will actually change the sheets not just make the bed, that enhanced cleaning really is happening. How likely are we to trust a hotel chain that tries to slip by a price increase while telling us it’s good for us?
- The biggest problem hotels face is not enough customers. The cleaning costs will amortize themselves nicely if there are enough guests. The solution to not enough guests during a global pandemic and severe recession is to raise prices which is what a surcharge amounts to?
- Hotels are already being investigated by state attorneys general for this. Whether they call it a resort fee, a destination fee, a venue fee or a COVID-19 fee it’s still a mandatory charge which means it’s a deceptive practice when it is not included in the room rate. Hotels are struggling, they’ll be struggling even more under the mountain of legal fees and fines they could be facing for doubling down.
- Oh boy if this is Marriott… Arne Sorenson says resort fees are good for you. Marriott, unlike Hilton and Hyatt, charges loyalty program members these fees when redeeming points.
If the fees aren’t deceptive and consumers calculate them properly when comparing room costs and making decisions where to stay, then all they are is a tax on loyalty program members and a devaluation of Bonvoy points. And it’s Bonvoy members the chain needs to lean on most to recover
Hotels can and should adjust pricing to generate the most revenue they can. That’s called the room rate, and hotels publish numerous different rates every day and vary their rates as needed. They can also incentivize use of on-property facilities, or raise and lower prices at those.
The worst approach would be for hotels to act in a deceptive manner, and undermine trust, when they’re struggling to fill even 40% of rooms and need that trust to get customers to travel let alone choose them for that travel. And raising pricing when occupancy is low, in the middle of a severe recession, seems like the height of stupidity.
Ultimately though the message that cleanliness isn’t part of the hotel’s basic product, that it comes at an extra charge, is perhaps what’s most disturbing.
Karl Marx said history repeats itself first as tragedy then as farce. Destination and venue fees were hotels repeating resort fees as tragedy, a COVID surcharge must be the farce?
I was joking when I suggested a toilet flush fee, an air conditioning fee, a housekeeping fee, a towel fee, quadruple zero roulette, a pool lounge chair fee, a casino admission fee, an hourly slot machine fee, a fee fee fi fi fo fo fum fee — all but the last coming to MGM 2020.
— Baadmaster (@Baadmaster) September 5, 2019