Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Hotels try out fees for using the pool and checking in early

Hotels try out fees for using the pool and checking in early

Lodging companies such as MCR are experimenting with a la carte pricing for services and amenities, and cutting room rates in return
One of the largest U.S. hotel owners is experimenting this year with a new business strategy: Charge guests for most services and amenities, just like in the airline industry.

At roughly a dozen of his company’s independent hotels, Tyler Morse said, any guest can get an early check-in, but it costs about $20. A similar fee applies to a late checkout. Use of the pool might be free on a Tuesday morning, but cost guests $25 on a scorching Saturday afternoon. Gym use and breakfast also come with an additional charge.

In exchange, these properties are lowering their nightly room rates by varying degrees, Mr. Morse said. His hotels trying out the pricing model include the TWA Hotel at John F. Kennedy International Airport and the High Line Hotel in Manhattan, he added.

Mr. Morse, chief executive of MCR Hotels, said a rocky transition period could occur before most hotel guests adjust to the idea of paying only for the services and perks they want. But he said the a la carte pricing approach is likely to be a hit over time.

"Not every guest wants every product, and they don’t want to pay for something they were never going to use anyway," he said. "Other owners are fully behind me, but there’s always a fear of change."

Hotel Business magazine last year ranked MCR as the fourth-largest hotel owner in the country by room count. The New York-based company currently owns nearly 20,000 rooms, Mr. Morse said.

It is impossible to know how many guests have sworn off MCR properties because of a dislike for the service charges, but Mr. Morse said his hotel staff reports few customer complaints related to a la carte pricing.

Still, numerous obstacles stand in the way of broad success for the pricing model. Most big hotel chains say they view it skeptically. The hotel industry is by nature slow to adopt significant changes, and many properties lack the technology to implement an a la carte pricing system. Airbnb Inc. and other short-term rental companies offer alternative lodging in most every market for any travelers who feel hotels impose too many fees.

But some hotel owners and operators say they have little choice but to shake things up. The pandemic decimated the industry in 2020. Just when business was picking up this year, chronic labor shortages and the Covid-19 Delta variant hit travel again. U.S. hotel revenue per available room, a popular industry metric, isn’t expected to return to 2019 levels until 2024, according to hotel data tracker STR.

At the same time, hotel owners have increased spending on sanitizing their properties to prevent the spread of disease. Hotels need to recoup those extra costs and losses, said Kerry Ranson, chief executive of HP Hotels, which manages about 30 hotels.

"And the only way to do that is to charge for things that are convenience items," he added.

The hotel industry has dabbled with a piecemeal-pricing approach before, and some lodging companies continue to do so. Many operators initially charged for Wi-Fi connections, and a number still add a fee for higher-speed service. Much of the industry is also moving toward a new housekeeping standard where service is offered daily only on request. Some hotel owners are experimenting with charging extra for it, industry executives said.

"It shows the consumer is willing to pay for it," Mr. Ranson said, "and for years we’ve been giving it away."

Mr. Ranson said he hasn’t implemented any of these practices yet because the hotels his company manages are affiliated with major brands. Big lodging brands such as Marriott International Inc. and Hilton Worldwide Holdings Inc. manage or franchise more than half of the 5.6 million hotel rooms in the U.S., and owners say they would need brand permission to implement this kind of change in the pricing model.

Brands are reluctant to put themselves at a disadvantage against their peers by charging for a popular service that a competitor provides free of charge, hotel owners say. Marriott Chief Executive Tony Capuano said guests would "push back" against an a la carte pricing model, and he is skeptical that most owners affiliated with his hotels would support it.

"We will continue to be influenced by what we hear from guests and partners," he said in an interview. "But it would be folly to have a knee-jerk reaction to what may be a vocal minority."

When airlines started to charge fees for checked luggage, passengers were irate. Members of Congress held hearings about whether to limit or ban the practice. But eventually customers grew to accept it, Mr. Morse said.

In 2019, airlines world-wide collected $75.6 billion in a la carte revenue, more than doubling what they collected in 2015, according to a study from the consulting firm IdeaWorksCompany and CarTrawler, a firm that works with car-rental and travel companies. A la carte revenue included fees for checked baggage, assigned seats, onboard meals and entertainment.

A shift to service charges with lower room rates would also save hotels money on reservations made through online travel agents, such as Expedia Group Inc. Those companies generally receive a percentage of the room rate booked on their websites, but wouldn’t collect fees a hotel owner charges on amenities at the property.

That extra revenue sounds good to Greg Friedman, chief executive of Peachtree Hotel Group, the owner and operator of about 65 hotels in the U.S. But he isn’t going to be an early adopter of the new pricing model.

"The whole industry, if the brands bought into it, everyone would accept it," he said. "But the challenge is, who would jump off the cliff first?"
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
OpenAI Sued After ChatGPT Allegedly Discouraged Emergency Care Before Near-Fatal Embolism
Miliband Sets Climate and International Law at Centre of UK Diplomacy
Czech Central Bank Governor Rejects Early Euro Entry and Rate-Cut Pressure
Trump Readies New Tariffs as Temporary Global Levy Nears Expiry
Vivienne Westwood Casts Cicciolina, 74, in Its New Autumn Campaign
Dejavu: Germany’s Military Expansion Reshapes Europe’s Strategic Balance With France
Morgan Stanley Builds a Wall Street Lead in AI Infrastructure Finance
High Prices Push Coffee Drinkers Toward Whole Beans and Home Brewing
Trump Draws Boos and Podium Scrutiny at Spain’s World Cup Triumph
Brilliant move: Péter Magyar Moves to Nominate Chess Grandmaster Judit Polgár as Hungary’s President
Spain Defeats Argentina in Extra Time to Win Second World Cup
Current AI Seeks to Build an Open Global AI Infrastructure Outside Big Tech Control
Germany’s Economic Malaise Reopens the Sunday Shopping Debate
Proposed U.S.-Saudi Nuclear Pact Could Permit Limited Uranium Enrichment Under International Safeguards
Netherlands Declares Water Shortage Emergency After Drought Pushes Rivers to Historic Lows
Why Kentucky Fried Chicken Became KFC—and Why the False Explanations Persist
Ukrainian Drones Strike Wildberries Warehouses Deep Inside Russia
Reported CIA Mission Helped Clear the UAE’s Path to Advanced US AI Chips
Artificial Intelligence Capital Fuels Markets While Governments and Regulators Face Mounting Strategic Tests
China’s Moonshot’s Kimi K3 Narrows the Gap With Anthropic Through Scale, Openness and Lower Cost
The Ledger Will Not Trust on Faith
Trump Administration Pressures Banks to Restrict Financial Access for Undocumented Immigrants
Passenger Bound for Germany Refused to Sit Beside a Woman on a Plane — Then Slapped a Flight Attendant
Ukraine’s Leadership Rift Spills Into the Streets as Protesters Target Army Chief
Ukrainian Drone Barrage Kills Eight and Strikes Russian Logistics Network
The Ten World Cup Finals That Defined Football History
Smartphones Are Getting More Expensive, Sales Are Collapsing, and Even Apple Admits: "Prices Will Rise"
The Monaco Bombing Has Become a Test of Ukraine’s Intelligence Accountability
Leadership Change and Strategic Rivalry Redraw the Political Map
The AI Race Enters Its Infrastructure Era
Britain Nationalises British Steel to Protect Scunthorpe Production and Strategic Supply
French National Assembly Overrides Senate to Pass Historic Assisted-Dying Legislation
Spanish Prime Minister's Wife Ordered to Stand Trial as Corruption Probes Encircle Governing Party
Zelensky Faces Kyiv Protests Over Ousting of Dynamic Ukrainian Defense Minister
Thomas Tuchel Faces Fierce Backlash After Tactical Retreat Costs England World Cup Final Berth
A Quiet Bastille Day: France Grapples with World Cup Heartbreak and Leftover Fireworks
Spain in Ecstasy: "We Feel Unbeatable, We Taught the Whole World a Lesson"
Spain and UK Dismantle Gibraltar Border Following Landmark Schengen Integration Treaty
Hungary's "Puppet" President to Be Ousted, Orbán Fumes: "Democracy Is Dead"
Forget Tinder: The Surprising Platform Where People Find Love
Harvard Astrophysicist to Lead U.S. Scientific Advisory on Unidentified Aerial Phenomena
Emergency Sirens Activated Across Bahrain as Interior Ministry Issues Shelter Directives
World Cup Visitors Turn American Big-Box Stores Into Souvenir Stops
Netflix Weighs Always-On Channels, Bundles and Short-Form Video
Passenger Is Pulled Partly Outside Ryanair Jet After Window Fails Mid-Flight
The AI Invoice Shock: Layoffs Didn't Save Managers Money — They Cost Them More
Concern: Sexually Transmitted Bacterium Among Men Develops Antibiotic Resistance
Passenger Partially Pulled Out of Ryanair Jet After Cabin Window Fails Mid-Flight
Severe Heatwave Drives Dangerous Ground-Level Ozone Pollution Across Two Thirds of European Union
The Physical and Electronic Barriers Disrupting Domestic Wireless Networks
×