Monday, October 17, 2005

Hotel Internet Charges Revisited

A few days ago, I wrote about an article in the New York Times which cited increased hostility among hotel guests being hit with additional internet charges. You can read the article and accompanying comments here.

One of the comments came from Luke Mellors of the Dorchester Hotel in London. He was one of the individuals interviewed in the original NYT article, and I thank him for weighing in on the other side of this debate, and appreciate his willingness to explain his position. While I agree with him on some concepts, there is still much to respectfully disagree on.

First of all, Mr. Mellors is dead-on right when he says that it's all about value. Whatever it is we are purchasing, for whatever price, we expect value for our expenditure. Our expectations are different when we spend $100 than when we spend $500, but regardless of our price point we still expect value.

I have never been to the Dorchester, but understand that it is quite a lovely hotel. Mr. Mellor's is correct in that there is a cost in providing and maintaining internet access, and that it is reasonable to pass that cost on to your clientele. I do, however, take issue with Mr. Mellor's assertion that it is unfair to pass that cost on to the majority of hotel guests who he claims neither want nor need that service. The concept of choosing amenities and then passing the cost onto the hotel guest is a long established principle in the hospitality business. I don't want, nor need, the hotel mini-bar in my room. In fact, I know very few people who actually use it. Yet, the hotel has determined that it is an amenity that they wish to provide, and pass the attendant costs on to its guest. I feel the same way about the swimming pool, and quite frequently the television as well.

It's not a matter of unfairness at all. It's a matter of the hotel determining which amenities are important to provide and then amortizing the cost of that amenity into its rate structure. In this instance, it's a mattering of deciding that providing internet access to hotel guests at no additional fee important. The Dorchester says that this is not an important fee-free amenity to provide to guests. Which would be fine, except that this determination is based on the opinion that less than 50% of hotel guests use the internet service. This cannot be viewed as supporting the position that less that 50% of guests wish that this service was provided. On the contrary, it merely establishes that less than 50% of the Dorchester's guests are willing to pay the approximately $33 (U.S.) daily fee for internet access.

Mr. Mellors next brags about the hotel's E-Butler service, which, I might add, sounds mighty fine. He says that while the hotel has chosen to charge for internet service, they provide this free E-Butler service to ensure that guest technology needs are met. FREE? This is not a free service. I thought that we had already established that there are no free services. It's all passed on to the consumer in some way, shape or form, either in the daily cost of internet services, or in an increased room charge. So please don't insult me by bragging about this free service. And while we're at it, why is it fair for me to pay an increased room charge for idiots who don't know how to configure their laptop. Especially, and this is using the hotel's logic, less than 50% of guests want internet services, and one cannot only imagine an even smaller percentage of guests need the services of an E-Butler. (NOTE: It sounds like a great idea for a conference or event, but I find it strains credibility for the hotel to pass on the cost for a service such as this to all guests.)

I think what we are seeing, on an increasing basis, is business travelers who want to know what the bottom line will be for their hotel stay. They don't want to be hit with all sorts of add-on charges. I think everyone realizes that their is no such thing as a free lunch, but is it to much to ask for a hotel that markets itself as a business hotel, to include business amenities as part of the standard room rate. I don't think that's to much to ask, and from what occupancies rates are showing, there are a whole lot of people staying at hotels that agree with the concept.


Anonymous said...

A lovely article and again takes a look at a real issue within our industry.

We are concentrating on Internet too much. The Dorchester has invested in an In Room Technology environment that includes a 42" Plasma that can double as a TV or computer monitor, HP printer, fax, scanners, Bose sound system and a HP p4 PC in every single room.

To back this up we have invested in a network that is secure in relation to port to port security. You may not know but most Hotel networks are far from safe from hacking and viruses - ours is.

We have integrated VGA, USB, and Ethernet points throughout the room allowing guests to connect USB devices such as camera's, IPOD's, MP3 players and mobile phones to the In Room PC.

Further to this all EButlers are exceptionally trained technology individuals with great guest service skills.

We offer on our system 3000 radio internet stations (no charge) through our system so you can listen to local radio.

In the future we will be offering 1000 TV stations via IP-TV so you can your home programming from where ever you are be it the US, Russia, South America or otherwise and watch whatever it you would like to from around the world. We are also integrating web cams and messenger into our system to allow guests to talk with their family and friends whether they have a laptop or not.

We aim to deliver a technology service experience that is consistent with what luxury travellers look for in today's world. We charge nominally for certain services such as movies, music on demand (5000 tracks) and Internet but also offer the E-Butlers to assist our guests when they need to use technology for them.

No one ever goes to the internet as a destination but as a highway and our service ensures that they get to where they need to go.

We have won Industry and Technology Awards for our refreshing interest in technology for our guests sake.

When you order room service you know it will cost you more than Dominos down the street but you pay for it because of the service and convenience elelment. Why should technology be any different.

If it is just an amenity I agree provide it for free but if there is a service attached then that is a different scenario. With respect to the mini bar - yes the mini bar is in the room at no cost but what you consume you pay for and this is the same with the Internet.

Luke Mellors

Fly Girl said...

Mr. Mellors is right in saying that although the focus of the discussion has been about internet access, it really centers on a whole lot more.

It gets down to what we are willing to spend to have the amenities and services we desire. I agree with Mr. Melllors completely that these are two different things. For most of us, there is a price point beyond which we cannot go, no matter what our particular wants may be. Whatever that price point is, however, we want maximun value for our dollars spent.

Each of us define that value is different way, and this is part of the reason that hotels have adopted different marketing strategies. As travelers become more savvy and demanding in their definition of "value," hotels have begun to more precisely define their target demographics. They are no longer trying to be everything to everybody, but are more closely aligning themselves to travelers who specific demands (whatever they may be) their property can meet.

I'm glad that everyone understands that this discussion is in no way a reflection on The Dorchester, or any other property for that matter. It is merely a broad discussion of the issue hotels face in general.

And by the way --- after checking out the Dorchester's website, I have to say that it looks like a marvelous luxury hotel.

NOTE: Mr. Mellors, if you are still following this discussion, please contact me via my email. I would like to respond to you directly, but did not have an appropriate email address to you.