MCR Hotels, the fourth-biggest hotel chain in the US, has revealed it’s introducing an a la carte pricing model for many of its amenities.
That means extra costs on everything from the gym, the pool, to early check-ins or outs to even breakfast. The TWA Hotel at John F. Kennedy International Airport and the High Line Hotel in Manhattan are among the first to experiment with the surcharges.
Fortune reports that an early check-in could cost up to $20 and a single day in the pool could set guests back $25.
Hotel surcharges are not new. They are part of a trend that was already creeping up, pre-pandemic, pioneered in places like Las Vegas, which started adding ‘resort fees’ that ratcheted up the costs of seemingly-reasonable or discounted hotel fees.
Yet even resort fees still bundled a number of amenities into what was effectively a non-commissioned price hike that could result in a daily fee close to the cost of the room and nearly double the guest’s final bill.
But ‘pay for play’ for individual amenities is a newer take on the surcharge model - for hotels, anyway.
The same model for airlines has been wildly successful, profit-wise. In 2019, airlines raked in $109.5 billion worldwide from surcharges, according to airline consulting firm IdeaWorks and technology platform CarTrawler. In 2020, during the pandemic, this did drop dramatically, commensurate with the slowdown in air traffic. But airlines still added the hefty sum of $58.2 billion to their bottom lines due to surcharges.
Other hotel chains, asked in the report about the individual amenity surcharge, said they feared blowback from customers feeling nickelled-and-dimed just as travel begins to recover.
Winning Customers Over with Lower Room Rates - But that Translates to Lower Commissions
MCR Hotels, for example, says it may be able to win disgruntled customers over by offering lower room rates as some guests may not want to use amenities like the gym or the pool anyway.
Of course, if this trend catches hold, it would be another blow to travel retailers, who only get commissioned on the room rates - but not on subsequent upcharges.
But hotels still might find themselves in hot water over the latest attempt at adding surcharges on top of room rates.
In late 2019, just before the pandemic hit, OTA giant Expedia (and all of its search sites, including Hotels.com, Orbitz, Travelocity, Hotwire and CheapTickets) went to war with hotels that imposed resort fees, dropping them lower on Expedia search results than hotels with inclusive prices.
Competitor Booking.com also tackled the resort fee issue, announcing it would automatically take a commission from any hotel that added resort fees onto advertised rates.
Even the U.S. Congress got involved in the resort fee controversy, initiating a bill to ban the “unfair and deceptive” practice, and a number of states sued large hotel companies over resort fees.
It’s possible that the transparency of a la carte pricing and the ability for guests to opt in or out of products or services as they wish may stave off the ire of lawmakers.
But it won’t restore reduced commissions from lowered room rates to travel retailers.
