I think that Spoons gives an excellent explanation for the upcharges at full-service hotels: the upcharges give the hotel something to comp with its loyalty program.
You can’t upgrade every loyal customer to a suite, but you can comp his breakfast or her Internet charge. If the choice is not between a Hilton and a Comfort Inn, but between a Hilton and and a Hyatt, that might make a difference, especially for travelers who are paying themselves, or who have more penny-pinching employers.
The fact that the free breakfast at the fancy hotel (the Palmer House in Chicago, for instance) sometimes isn’t as good as that at a Comfort Inn is perhaps beside the point.
I imagine the loyalty programs are another way of giving breaks to people that might be price sensitive, like leisure travelers, as opposed to people not price sensitive, like people on business expense accounts. I recall a hotel owner on Quora stating that most businesses switch hotels periodically because a different one gives them a break, or they just get tired of the same wallpaper, so the loyalty programs would probably exclude those travelers. Probably the bottom line price for a room is what a business uses to award a hotel, like travelers searching for a low price on Kayak, not figuring in the cost of the extras.
I personally stay in Holiday Inn Expresses. They seem to be above the threshold where you risk getting a disaster and below the threshold where you get nickel and dimed for everything.
Actually, I’ve been far more disturbed by people talking in hallways midnight or later which happens no matter how expensive the hotel than by kids at midnight. I guess if someone hates kids they’d be annoyed. I just stayed at the Disneyland Hotel for a conference, and none of the kids around were in the slightest bit annoying. maybe I was lucky.
But many conference are in resorts. Which are twice as obnoxious as top scale hotels in cities.
I was at one in the middle of the flippin’ desert - and they charged for parking. A lot.
And had $20 porkchops for breakfast. And attendees were told to not wear badges in public areas because it cheapened the place. (This was a high end engineering conference, btw.)
The danger is that this conference had expected to return the next year, but the attendees were so pissed off that the conference moved someplace else.
However many companies have rules about which hotels you can stay at, often not conference hotels, which means that the attendee must stay relatively distant. They do this to negotiate company rates with the hotels which requires volume.
But not free breakfast delivered to your room, which is the point I was trying to make. And cheaper hotels have free parking, but not free valet parking.
I do realize that some services are the same as available for free in a cheap hotel, like Wifi. But for most others, what you pay for at a high-end hotel is not the same service as you get for free in a cheap hotel. It may be serve the same need, but it’s a more convenient (and more labor-intensive) way to meet that need.
Amenities are useful to business travelers. As a tourist, you are usually happy to be wherever you are, and not particularly interested in hanging out in the hotel. But when traveling on business, the novelty wears off quickly and you are often tired and not particularly excited to be uprooted from your home and family. You may not feel like exploring the city, or you may not have time or the capacity to do so (my last business trip involved being 7 months pregnant in the dead of summer.) Being able to keep up a fitness routine, eat without navigating a new city, access a fax machine or printer, and maybe relax in the spa before the big meeting is extremely valuable.
This goes triple for international business travelers, who find the comforting sameness of major hotel chains to be useful in keeping them focused on the task at hand rather than dealing with language and culture shock.
But the cheap hotels often don’t need valet parking. The cheap hotel at Exit 129 can afford (and is probably required by suburban zoning codes) to have a few acres of parking lot next to the building. Valet parking isn’t much of a convenience when the self-parking is right there next to the door. The Hilton Elite Megalopolis Towers is probably paying by the square millimeter for garage space, and valet parking means it can use that space more efficiently by putting it in a place that’s less convenient, double-park cars, etc.
It’s not a matter of need. It’s a matter of what service customers want. Even if the parking lot is right next to the hotel entrance, there are customers who want (and expect) the convenience of valet parking.
Imagine? I don’t go to higher-end places very often, but when I go to a high-end steakhouse, for example, I’ve found that pretty much every time that neither sides nor salads are included with the entree. Yet if I go to Outback, I get a salad and a baked potato included with my steak.
Some places don’t even have free refills for sodas–you want another glass of soda, that’s another $3.
So I’d say that, in my experience at least, high-end restaurants tend to be more like high-end hotels in that regard.
I used to travel a fair amount for business, but since I dropped out of corporate life, I no longer travel for business.
The $300 / night hotels charge the $20 for the same wifi that Basic Business Budget Hotel (BBBH) give for free because they can.
We had guidelines for hotels, and they needed to fall in a certain price point. But could expensive all of the other things such as $35 breakfast buffets. It would easily run another $75 to $100 / night for everything.
If you are going to those places on your own because you can afford it, then you don’t worry about it. I guess. I’m too damn cheap and even when I could technically afford it, I hated getting nickeled and dimed to death.
But if you ever are in a situation like the wedding party, negotiate! I used to take groups of Japanese to the US and with parties of 50 to 100, someone is getting the pricing break. It’s either going to be you or the travel agent, so make it you.
The main thing is - people who are bothered by the prices and extras aren’t staying in a $300 a night hotel anyway. If $20 a night for Wifi bothers you, you probably booked the lower end hotel down the road for $129 with free wifi on Hotels.com or Expedia. You’re there because $300 a night gives you what you want, even if it does not include wifi.
(On one visit to NYC we stayed near Queensboro Plaza for $129/night instead of $250 in lower Manhattan. It was OK, and not much longer to get into the city, etc. Still - we liked the location for $250 a night…)
When I visited Singapore a few years ago, I decided to treat myself to a nice hotel (not Raffles, because I didn’t have a spare $900 a night lying about, but still an upmarket place) and while the room rate included a delicious buffet breakfast, Wi-Fi was $20 a night extra.
I asked the Concierge about this and he (quietly) told me a great proportion of their clientele were business customers with expense accounts, so for them a $20/day Wi-Fi charge was a legitimate business travel expense which they weren’t actually paying for out of their own pocket anyway, so yeah.
So, in other words, the market for budget hotels is like coach plane seats while the market for upmarket hotels is like business and first class plane seats? I guess it’d make sense for airplane travel and travel lodging to be similar.
Then there were those of us whose travel rules were written to the effect that, other than taxes, you would be reimbursed for an amount no greater than the advance quote previously authorized. Which would inflict some pain if the meeting-venue hotel is one of the upmarket properties and does not have easy nearby alternatives and they’d sock you with unquoted fees. Not everyone on a travel authorization has the same definition of “reasonable expense”.
If the meeting was in a place with good midrange alternatives my finance trolls would not object to my looking for a better deal: if the “official” venue was a JW Marriott, but there was a Courtyard by Marriott (free WiFi) down two blocks, that would quote equal or less, they’d usually approve it. (Sometimes they’re just unwilling to exercise judgement, after all nobody’s ever fired for hewing to the letter of the law. Once I had to help the Big Boss draft a Circular telling them that yes, an extra fee that is not part of the “rate” line-item, but that *everyone *gets charged for, such as “fuel adjustment surcharges” and hotel “resort fees”, *could * be paid. )
To generalize this rule, and make an Economics 101 lesson out of it: This is a known mechanism of market failure, in which the standard capitalist law of supply and demand fails to force prices to their “right” level. When the party that has to pay for purchasing decisions isn’t the party that has to pay for it, the pricing structure can go wild like this. This is a standard lesson taught in typical Econ 101 classes.
This is why, in part, that pharmaceuticals are so expensive. The patient (or his insurance) pays for it, but the doctor (who isn’t paying for it) makes the decisions (mostly) about what drugs the patient needs to buy. So the pharma companies can sell their wares at inflated prices, and the patient (or insurance) is sort of stuck with that.
Another example, well-known to any student in Econ 101 (or any other college class): The outrageous prices of textbooks. These are selected by the professor (or the department or the college), and if the student wants (or needs) to take the class, he has to buy the book. Thus, like Big Pharma, likewise Big Text can sell their wares to the captive students at any inflated price they name.
This is part of the argument why certain goods and services, like health care, should be partially socialized even in a capitalist economic system.
Update: I’ve just returned from a trip to a big city. I spent a few days in a four-star hotel that I’ve stayed in a number of times before. But I haven’t been there for a year.
During my recent stay, I went for a couple of drinks in the bar. The server approached me and said, “Mr. Spoons, it’s great to see you again. You like an ale off the tap, as I recall.” She was right.
Needless to say, I will return to that hotel. Not just because a waitress in the bar remembers what I like; but because the hotel, as a whole, remembers how to make my stay as easy as possible. Based on my name and history at the property, check-in took about 30 seconds; check-out took about the same time. And as a loyalty member, I did not deal with a lot of nickel-and-diming as regards local phone calls, internet access, and so on.
Y’all need to read a memoir that came out a year ago, I forget the name but it was the hotel version of Kitchen Confidential written by a fellow who’d worked at a 4-star hotel in Manhattan for many years. What I learned…
…the person who makes the most money by far at a hotel is the bell hop. Any staff person who gets tips will be making more than the management. Being promoted to management is a significant step down because of that and most workers would rather have the cash…
…you can raid the mini-bar and watch all the pay per view porn and then claim that you didn’t or blame it on the cleaners and the charges will be taken off your bill without a quibble…
…as **Spoons **noted, hotels keep track of their guests and note their preferences, so that when they check in again, they can be welcomed with their favorite drink/room/tickets and be sent a card on their birthday. It’s all about customer retention…
That’s as much as I can remember for now. I looked it up: it’s called Heads In Beds. Very entertaining.
