Rise to the chal­lenge

As guests ex­pect more for free, hote­liers are hav­ing to be­come in­creas­ingly in­ven­tive with in-room charges to fill the hole


Times are chal­leng­ing for hote­liers. In­ter­na­tional busi­ness trav­ellers are push­ing for more and more ben­e­fits from their room rate, while sources of profit dis­ap­pear for the hote­liers. First it was mo­bile phones dec­i­mat­ing the ho­tel’s tele­phone rev­enues. Then its re­place­ment – charg­ing for the in­ter­net – be­came more dif­fi­cult as trav­ellers de­manded it for free. To put all this in per­spec­tive, 20 years ago, a 200-bed­room ho­tel might com­fort­ably make as much as eight per cent of its to­tal profit from in-room ser­vices. Now they face a hole that has to be cov­ered from other sources.

Cun­ning hote­liers who spe­cialise in the dark art of mak­ing money from tech­nol­ogy and in-room re­frig­er­a­tion were thrown a chal­lenge. It took a lit­tle thought, but there was a break­through.


The first was to in­tro­duce two in­ter­net speeds. Slow speed for free, faster charged at a pre­mium. This, of course, came about be­cause of the re­al­i­sa­tion that 60 per cent of all down­loads were not for email traf­fic but for movie sites, which in­ci­den­tally means no one is pay­ing for the in-room films any­more.

A lit­tle while back I had to pro­vide an anal­y­sis for a ho­tel chain to de­ter­mine the de­gree that free in­ter­net us­age was in­flu­enc­ing the de­cline of pay-for-movie in­come. The client wanted to know how much rev­enue could be com­pen­sated by of­fer­ing charge­able high-speed broad­band. Most ho­tels have their in-room sys­tems pro­vided free of charge against com­mis­sion on pay movie in­come. The client’s con­cern was, if this dropped too far, they would be ex­pected to pay for the equip­ment – a hefty charge if you think about all those rooms re­quir­ing flatscreen tele­vi­sions and con­nec­tions. The anal­y­sis showed there was a dis­tinct de­cline in peo­ple watch­ing the movies, though pay-per-view adult movie rev­enues were still strong at week­ends with leisure guests. My re­search re­vealed that there were also cer­tain na­tion­al­ity trends, and demon­strated that while the Bri­tish may fol­low the gen­eral pur­chas­ing trend, if there was a Premier League foot­ball match on, their pref­er­ence was to watch it rather than seek other en­ter­tain­ment.

In search of other ways to re­verse the rev­enue de­cline from tele­vi­sion and com­mu­ni­ca­tion ser­vices, the fo­cus has re­turned to the mini­bar.

As a gen­eral rule, greater tem­per­ance in cor­po­rate life means mini­bar use is also de­clin­ing – it is a “break even” op­er­a­tion at best. The cost of hav­ing a staff mem­ber check rooms and re­place glasses ev­ery day ab­sorbs po­ten­tial profit.

Read­ers will have en­coun­tered au­to­mated bar sys­tems to help in­ven­tory con­trol. These al­low au­to­matic billing and also tell staff which rooms need re-stock­ing and when. It doesn’t re­ally save the staff cost, though. Guests use the bar for the “wrong” rea­sons – to store medicine, cheese, milk and a menagerie of per­sonal items. In­evitably, these get left be­hind to the hor­ror of the next ar­rival, who gen­er­ally takes a dis­like to sy­ringes and cur­dled dairy prod­ucts. On top of that there ap­pears to be a breed of guest that takes sim­ple plea­sure in drink­ing the mini­bar con­tents and then re­fill­ing the bot­tles with var­i­ous sim­i­lar-coloured liq­uids (don’t ask). The re­sult is that each bar still has to be checked daily. The key to fi­nan­cial suc­cess for the savvy hote­lier is to per­suade the cus­tomer to steal less and spend more.

Re­cently, I stayed in a ho­tel in the States where, for a pre­mium, the mini­bar was in­cluded. I was dis­ap­pointed to find that it was only stocked with soft drinks and a cou­ple of beers. The con­cept had one ad­van­tage; it was ser­viced when the room was cleaned and saved me from the daily visit of an at­ten­dant to check the bar. How­ever, my feel­ing of benev­o­lence was di­min­ished by ir­ri­ta­tion at hav­ing to or­der my night­cap from room ser­vice. The time taken for de­liv­ery, the tip, tax and charge cost me both angst and cash. But money was be­ing made.

Now we’ve seen the rise of the hon­esty bar. In up­scale rooms, you can drink as much as you like from bot­tles in your room with the cost as­sessed at the end of the stay. It seems to work, but it doesn’t come close to re­cov­er­ing what has been lost in profit from the days of out­ra­geous tele­phone charges and over­priced mini cans of Coke. I pre­dict there will be some new ideas. The note en­cour­ag­ing you to “Save the Planet”, for in­stance. Rather than re­quest­ing you re­use tow­els, it will ask that you use them spar­ingly or not at all. Per­haps they will of­fer a dis­count if you bring a sleep­ing bag. And as for the air­con­di­tion­ing, now there’s an op­por­tu­nity.

Guests use the mini­bar for the “wrong” rea­sons – to store medicine, cheese and milk

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