MCR, one of the largest hotel owners in the U.S. with more than 15,000 guest rooms in 110 hotels, is shifting its pricing model so guests may have to pay for certain amenities, the Wall Street Journal reported. The properties that adopt this model will also lower room rates by varying degrees. Other hotels, with the exception of larger chains, are also experimenting with this model.
MCR chairman and CEO Tyler Morse told WSJ that early check-in or late check-out at the properties that have implemented the system would cost about $20 each, while use of the pool may cost about $25 on a Saturday afternoon, but may be free on a Tuesday morning. Gym use and breakfast would also have similar fees associated, he said.
The company is trying out ala carte pricing at the TWA Hotel at John F. Kennedy International Airport and the High Line Hotel, both New York metro area properties. Major hotel chains such as Marriott and Hilton, however, are reluctant to implement such changes, so MCR, which is also a franchise owner of Marriott and Hilton properties, according to their website, would need brand permission to start charging fees at those locations, according to the WSJ.
Some hotels, WSJ writes, are also experimenting with charging for housekeeping services. Kerry Ranson, chief executive of HP Hotels, told WSJ, “It shows the consumer is willing to pay for it, and for years we’ve been giving it away.”
Part of the impetus behind the change is the added costs of extra cleaning and sanitizing hotels must now invest in to prevent the spread of COVID-19. Add the loss of business through 2020 and the labor shortage, and it leads to dismal news for the hospitality industry. STR and Tourism Economics projections say that “revenue per available room” will not return to pre-pandemic levels until 2024.
Resistance to Change
Marriott Chief Executive Tony Capuano told the news outlet that guests would “push back” against the practice. And hotels already face intense competition from AirBnB and VRBO options, where guests can find more options to enjoy a full-size, private home with a full kitchen, yard, and pool – all for a flat rate
However, ala carte pricing has already been proven to work in the travel industry, with airlines collecting more than $75.6 billion in additional revenue in 2019, WSJ reported. That practice also encountered pushback, including Congressional hearings, when it was first introduced. Now, it’s a fact of life to pay more on certain airlines for checked bags, assigned seats, and even meals.
Can Travelers Save Money?
Hotel guests already make choices about sacrificing price for amenities when they choose their hotel. Travelers who just need a bed for a night or two and don’t plan to spend much time can choose a one- or two-star hotel, sacrificing amenities like a pool or free continental breakfast for a lower rate.
Paying ala carte for certain services would give guests the option to choose a more upscale, luxurious location but potentially pay less if they don’t want breakfast, a pool, or an on-site fitness center. If hotels do, actually, lower room prices rather than keeping rates the same and charging for amenities, it could save money for travelers who want to stay in a nicer location but don’t need any frills.
Just as you may compare the price of your flight but add the costs for checked luggage when booking airline tickets, you’ll need to keep in mind the amenities you’ll want when you make your hotel reservation. If you don’t plan to use the amenities, the ala carte hotel may be cheaper than the all-inclusive stay.
How Will ala Carte Pricing Affect Travel Rewards?
However, factors such as accruing travel credit card rewards — or cashing in points to book travel — may also be affected. For instance, you’d want to find out if you can earn rewards points for amenities charges if you put them on the same credit card. And it’s not likely you could use your points to pay for amenities the way you use points to book a room.
However, to entice guests to splurge for the extras, hotels might offer bonus points in their own rewards program for guests who pay for add-ons. The new pricing model just means travelers need to be even savvier when comparing pricing and consider all angles if they are looking for the best deal.
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