Of the many uniquely American curiosities known around the world, hidden ‘resort fees’ are not among the most celebrated. In many other countries (here in Australia, for example), consumer law prohibits any pricing tactic that hides or obfuscates the total cost of a hotel booking. In the US, however — and despite ongoing protest from consumers and some lawmakers — it’s still possible to book a three day resort stay for $600, only to be hit with a mandatory $300 resort fee at the moment of check-in or check-out.
As a long-time hotelier, it’s amazing to me that any property would use such tactics, even if the law of the land provided for them. We’re in an era where hotel brands must fight harder than ever to earn the loyalty and admiration of guests. A blatant lack of transparency in pricing seems like a surefire way to alienate guests in droves.
And yet, the biggest hospitality story of the 21st century so far — San Francisco-based AirBnb — itself uses slightly underhanded pricing tactics in every one of the millions of daily searches run on its platform. Only when you click through to advance your booking does the corporate service fee (plus the host’s own cleaning fee, if they charge one) appear with the total. The final price is usually 10-20% higher than what is initially advertised in your search results.
AirBnb is obviously a savvy company, and is studying the metrics of the decisions it makes. American hotels, too, are probably aware that guests aren’t huge fans of “resort” and “convenience” fees. So why not do away with them? The only answer is that, in these and other cases, sleight-of-hand tactics are still considered to be more profitable than total price transparency.
Larger issues of transparency
Even if these kinds of dubious pricing tactics are geographically limited in scope, they raise larger issues about honesty and ethics in the hospitality industry as a whole. Specifically, what is greater transparency worth to guests? By extension, what is the long-term value for hotels? In a market where the hotel experience (from booking right through to check-out) is constantly being reinvented, are there competitive advantages to actually being upfront with guests about what we are doing and why?
Unless hospitality is a special case in the business world, the answer is obvious.
Throughout the business world we are seeing a larger trend toward transparency, with guests wanting more information about the origins of goods and services, the ethics of our supply chains, and corporate social responsibility (CSR) in general. This trend is linked to the fact that our guests are increasingly like every other part of society – they want to know who we are, why we do what we do, and are we ethical in the way that we do it. Consumers increasingly distrust corporations, brands, and the motives behind their decisions. The British startup Provenance is one of several companies trying to cash in on transparency by providing companies and consumers with tech-savvy tools (apps, plugins and special product labels) to track the “stories, journeys and impact behind brands and products.”
(Research firm AMR have just released the 2017 report on the Australian brands people trust the most, and why and it is interesting to note that #1 is actually not Australian – it’s Air New Zealand! It is also interesting to note that of the top 60 brands, there are a few other airlines and travel-related brands but only one hospitality brand – Crown Resorts which joins the list at #51.)
In relation to our own staff, we could also consider what they know (or don’t) about the hotel’s operations and performance. In my last role I would always update staff on how the group was performing, be honest about what we were doing well and where we needed to improve. I believe our staff were then more interested and engaged as it provided context and transparency as to why we made the decisions we did. In keeping with much that’s been written about empowering hotel employees and building stronger organizations from the ground up, how can we challenge ourselves to be even more transparent at a team level?
There are no hard and fast rules, except maybe one: Information is everywhere, and people are less likely to blindly trust claims made by hotel brands. Working to be more open about our operations and pricing is a worthwhile effort, even if the exact parameters are unknown and may differ from property to property.
John Gerzema, a leading American CEO, columnist and brand expert summed it up beautifully when he said “Transparency, honesty, kindness, good stewardship, even humour, work in businesses at all times.”
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