Is Hotel “A La Carte” Pricing The Future?
Joe Cortez September 08, 2021
luxury hotel bedroom with nice decoration
Could hotel guests pay different rates based on which amenities they want to use at their hotel? The CEO of an independent hotel chain is experimenting with the idea of changing rates based on what guests want and is calling “micro economy” the future of hospitality.
Travelers who stay in major resort cities are already used to paying resort fees, with many rallying against the practice. But what if you had to pay extra to use the pool, on-site gym, or internet access? In an interview with Yahoo Finance, MCR Hotels chairman and chief executive Tyler Morse says pick-your-own pricing is the future of the guest experience.
MCR Experiments With A La Carte Pricing in New York With Success
MCR Hotels claims to be the fourth largest hotel owner-operator in the United States, with properties in 34 states – including the TWA Hotel at John F. Kennedy International Airport (JFK). Although their portfolio includes properties affiliated with Hilton and Marriott, Morse says their company is experimenting with “a la carte” pricing at some of their independent properties.
Under their model, guests are charged a single rate for their hotel room and have the option to pay more for add-on experiences. For instance: Checking in early or checking out late could be available to any guest for a nominal charge, while pool access at primetime could come with an additional fee.
“By going to an a la carte menu, it allows people to customize their experience and get exactly the product that they want when they want,” Morse told Yahoo Finance. “Consumers always have a choice in the matter.”
So far, the company says they have received positive feedback about the pricing scheme. However, they note that it might not be an option at every property. While a la carte pricing may go over well in major cities like New York or Las Vegas, those in smaller cities and communities may not welcome the change. Furthermore, some hotels affiliated with major brands already include these benefits to members of their loyalty programs, with check-out and higher-speed internet available to their elite guests.
While the practice may be controversial, Morse claims pick-your-own-pricing will be the wave of the future. If it has the power to defeat the practice of resort fees is yet to be seen.
“I think all the big brands will catch hold of this, because it’s better for hotel owners, and it’s better for guests,” Morse told Yahoo Finance. “It’s really the micro economy, I call it.”
Travelers Organizations Still Taking On Corporations Over Resort Fees
Meanwhile, the conflict over resort fees rages on. In March 2021, Travelers United took MGM Resorts International to court claiming the practice of collecting resort fees on top of room rates violates the Consumer Protection Procedures Act in Washington, D.C.
The resort fee model is just another way of denying tax revenues to the local government. It's just like the fuel surcharge. There's no taxes levied on these line items, and yet, the companies take in the full amount and pad their profits.
Remember the $9 fares, with the surcharges that are slapped on top of it?
The problem will be that the hotels want to charge the "all in" price for a room PLUS adding on for the uses of any amenities. Seems to me the pricing should be reduced for the existing prices and then make amenity prices extra. want a bottle of water? 5$
want your room cleaned? 20$
want to use the pool? 20$
want to use the gym? 20$
want to check in early out out late. 10$ per hour
want internet? 10$
want TV.? 10$ BTW. Last year the room was 200 per night, now it is 200 per night plus amenities.
I was staying at a hotel near LAX recently with poor cell phone reception, so I stupidly used the hotel phone to make several domestic calls. The property charged me a $10 "connection fee" PER CALL in addition to a per-minute charge. This included my local calls. With less than an hour of calling I had racked up more in phone charges than the room rate. I think this is a real sign of things to come with hotels. Traveling in general is becoming less and less endearing.
Joe I think you will see "all carte" more and more in the future for Goods and Services it just makes sense, pay for what you use and be done with it. Of course no matter what you do the hotels are going to get you after all look at the amount of lost revenue they have let alone repaying the investors. Travel will never return to the pre covid world at least not for a very long time and certainly hotels / resorts will not, period.
Low cost carrier model for hotels? Next time you need to pay for a bed (or bring your own sleeping bag).