Many in the industry have long maintained that hotels need to look to other industries for more effective and profitable pricing models. The general idea is that the hotel guest has been trained to expect a host of amenities and services as part of their stay. This seems to have been exacerbated during the pandemic.
Such opinions were shared a few months ago during one of our virtual BITAC events when several veteran hoteliers were bemoaning the fact that hotels seemed unable to drive rate and yet continue to give away the store, so to speak, when it comes to amenities and extras that guests have now come to expect.
Interestingly, MCR Hotels—one of the largest owner/operators in the industry with approximately 110 properties in its portfolio—has decided to implement an a-la-carte type of pricing approach for a number of guest services at about a dozen of its properties, including the well-known TWA Hotel at JFK Airport in New York.
Morse acknowledged the new practice in an interview with The Wall Street Journal, where he noted some of the examples of this will include guests paying a fee to check-in early or late, as well for use of the fitness facility and the swimming pool on the weekend, for example. Other such amenities that could come at a cost to guests include breakfast, housekeeping and WiFi, according to The Wall Street Journal report.
Of course, we’ve seen this kind of pricing approach at the luxury level many times in the form of resort fees or other thinly veiled charges. However, for a mainstream management company to introduce such an approach could represent a big step, particularly in a copy cat industry. You have to figure if the model is successful at these 12 properties the company will extend it to others within its sizable portfolio.
But just how do you define success? That’s the million-dollar question. Is it by generating additional revenue and profitability? What if you generate more revenue but see guest satisfaction scores drop as they feel they’re getting nickeled and dimed, for example?
As the saying goes, no guts no glory? As such, you can bet many in the industry will be watching closely to see if there is glory for MCR, or more importantly, a healthier bottom line.