The Andaz Singapore is taking a page from airline Basic Economy fares, offering a new ‘room only’ rate as first noted by Singaporean blogger Milelion. When you think of room only, you may assume that it simply excludes breakfast or other inclusions. In this case they mean it literally: you can stay in the room, but have no access to the hotel’s gym or pool.
The rate is available on third party site Klook.
Room Only Package: Kindly note that this package is only entitled to a 1-Night Stay in a King Bed / Twin Bed Room with in-room minibar, once per stay and all day refreshments at Sunroom on Level 25. This package does not include Breakfast, Swimming Pool Access and Gym Access.
I don’t think I’ve ever seen anything like this before from a full service hotel, though invite reader experiences. The gym here is accessed by key card and pool use currently needs to be reserved so access control may not be a challenge for the property.
This is a way to offer lower rates on third party websites than through Hyatt’s channels best rate guarantee doesn’t apply since you aren’t booking the same room under the same terms, these restrictive terms aren’t available through Hyatt.
There’s further explanation of the ‘room only rate’ as “due to the swimming pool and gym access being fully booked” but the hotel is selling other rates without this exclusion. Currently due to social distancing requirements the hotel takes advance reservations at the pool within 72 hours – and, as Milelion notes, their online booking system shows plenty of availability within that window.
These rates may be useful to a hotel along a certain margin, but it would be a very bad idea to make them commonplace.
- The economics don’t actually make sense. Once the hotel invests in a gym and a pool or similar facilities, the marginal cost of allowing access to additional guests is very very low. There are fixed costs to offer these amneities, but it doesn’t cost much to make them available to an additional room. So the profit-maximizing strategy, once they’re available, is to bundle them rather than unbundle them (like your cable bill).
- They erode a hotel’s competitive advantage over Airbnb. Hotels need to double down on what makes them unique and play to their strengths, otherwise just book an unserviced apartment. By the way for the same reason hotels need to bring back daily housekeeping quickly, rather than delaying this for cost saving reasons which will be tempting.
It’s unwise for a hotel whose product differentiation is based on service to follow the airline model mocked 33 years ago by Alaska Airlines, back when airlines seemed full service in comparison to today.
We’ll be watching the future of this rate with interest.
I think your economic analysis is putting too much weight on the cost analysis. You know, hotels are kind of like monopolistically competitive. The Andaz has some market power and there may be a rationale for price differentiation.
We all realize that hotels have traditionally used other things to price differentiate (flex vs. non-flex rate, advance booking vs. short-term booking, standard vs. executive room etc.). But these are hard times. Maybe they’re thinking of some hipster kids which would love to do some selfies in the lobby and in their room. And if the non-basic rate is too high for these kids but the BE rate is not -> there you go. As room inventory is not really a constraint these days, maybe this is an attempt to seperate the hipster kids from the other guests.
I think it is honestly their way to maintain availability for the pool/gym and the breakfast area right now. Yes, the pool isn’t fully booked, but a luxury hotel likely wants customers to have options when reserving the pool and ensuring there isn’t significant queuing at the breakfast/gym. That’s the only explanation I have for why those areas are restricted yet the complimentary minibar and Sunroom refreshments are still available, which almost certainly costs them more than the pool or gym use.
I think it is another way to get customers in at cheaper rate and avoid best rate guarantee – something the Hilton hotels were using for years but in a form of different cancellation restrictions.
In US we go in an opposite direction hotels are simply adding resort or destination fees to the basic room rates without ways to opt out.
I’d like this idea if it meant lower rates. I spend 200 nights a year in hotels and really only care about room size, view, bed softness and disposable shampoo bottles. I’ve never used the gym, pool, or breakfast except at lodges where food isn’t available from other places. I’d also love a basic business class where I pay less to not eat airplane food. I’d buy that all day. Unfortunately for these businesses it means that I’d be opting down, not up, which defeats the purpose.
It is a room rate that opts out of all the things hotels are adding a resort fee for. If this were offered at the cheap rate hotels in Vegas and had no resort fee and no resort fee amenities available, I’d do it in a heartbeat. Give me a basic economy room with no wifi or pool or gym and a crappy view (and no resort fee) – I’d be fine with that.
@John – how on earth is there hotel market power when hotels are empty, broadly speaking?
I’ve stayed in a few hotels over the years that charge for the pool or gym, especially in Japan. The Westin Kyoto used to (they may still do this), even for SPG elites. Doesn’t seem outlandish to me at all.
There’s no marginal cost to the hotel, but there’s marginal benefit to full-rate guests who can enjoy fewer crowds at these shared amenities. In turn, this makes high value guests more likely to choose hotels that offer basic economy rooms.
As for precedent, long term furnished rental providers such as Zeus Living often negotiate with landlords to offer room access only (no onsite amenities). Zeus gets a lot of bookings through Airbnb.
There are some hotels in Europe where access to the hotel pool is not included in most room rates or at least hasn’t been for at least some prior years of operation. The Clarion Sign in Stockholm has a history of having the hotel pool — and at one point maybe even the hotel gym — off limits to most hotel guests unless paying a surcharge for the pool (and maybe also the gym) use. But this hotel has always had breakfast included for all guests regardless of room type.
Once a hotel makes the hotel pool access something that isn’t included for all guests, it may end up sticking with the pool surcharge approach for years to come.
Jason, it isn’t always done to reduce crowding. It’s more commonly done to create supplemental revenue streams.
“@John – how on earth is there hotel market power when hotels are empty, broadly speaking?”
If hotels had no market power whatsoever, their optimal strategy would be to set the price to marginal cost. But that’s not happening, prices are depressed but above marginal cost IMO. That suggests hotels have some market power still.
Oh what is THIS crap?
Do we really need Basic Economy rates at hotels only to cause a rate increase for “standard” rooms across the board?
Just the airlines did?
We’ll eventually see an industry-wide price hike to justify the Basic Economy pricing. I hope this massively fails, because there will be no cost savings to paying customers.
For economy price, it doesn’t sound weird to me. When I was travelling in Japan, none of the room rates included pool and gym access. If Andaz has the potential to charge for that access, that’s incremental revenue.
Pre-( and most likely post-)covid I visited the pool/gym perhaps one stay per year, so I wouldn’t miss it, but I too find this to be a very annoying development, just like basic business (even though I seldom eat onboard in business). It just feels so cheap and as Gary pointed out reduces the hotels’ comp advantage vs AirBnb. As others have noted, the practice is however not unheard of in EU and Japan, but I’m always chocked when I pay good money at a hotel and they ask me to pay even more just to access a pool. Just seems so cheap.
See nothing wrong with this to DRIVE incremental revenues.
As others have stated, paying for gym or pool access is not uncommon in Japan and other countries. I think Marina Bay Sands charges for access to their iconic rooftop infinity pool (at least for non registered guests and maybe guests now as well).
In any case, most travelers don’t even use the pool or gym. I never did on my business trips. And nowadays, I would rather take a run through the city than on a treadmill.
This is one of those things where people who care/used the services are going to get irritated, but people who don’t will find the appearance of saving money to be useful.
I like to sleep in past standard breakfast hours, have used the pool in years, and have only recently started giving a rip about a hotel’s gym. And there are also times where I’m only in the hotel for a quick night’s sleep and don’t care about the rest of this stuff.
So… since the airlines broke us of the “all inclusive” mindset, I’m pretty sure the hotels won’t have too much trouble with this.
I actually the economics are good for travelers and mixed for hotels. You get to see exactly how much hotels value all the extras that I never use. Also, it may spell the beginning of the end of the resort fee if you can effectively opt out.
For me, the value of a hotel over AirBnB is ease of booking and lack of extra fees. Hotels that don’t nickel and dime me have a competitive advantage over AirBnB for my business.