The hospitality industry gets more inhospitable

For an industry that markets itself as catering to the whims of its guests, the hotel industry sure goes out of its way to make a bad final impression. I just had a wonderful stay at the Westin Resort & Spa in Whistler, B.C. A super comfortable Heavenly Bed. A great room with a fireplace and kitchenette. A location right next to the slopes. Friendly service.

Keep your gear out of your roomYet my final impression of the hotel was sullied when I got my bill under the door the last morning. The bill had nearly $70 in charges for the “ski valet.”

Hotel policy doesn’t let you keep skis in your room. It makes sense: it keeps people from dragging wet gear through the hotel, keeps the hallways and rooms free of ski damage and reduces the hotel’s risk that someone trips and gets injured. What they don’t tell you is that they charge for it. Not when we checked in nor when we checked our skis.

When I complained at check out that the charge wasn’t disclosed, the woman at the front desk mentioned that they get that complaint regularly.

This is the latest in a long line of “gotcha” charges from this industry. Instead of being seen as valued guests, we’re seen as sources of “ancillary revenue.”

I’m not talking about the charges we’re all familiar with: anyone who uses the hotel phone for anything other than calling the front desk or concierge clearly doesn’t care about their (or their company’s) money, or minibar items that cost 5x-10x their retail value.

A few other gotchas that I’ve noticed recently:

  • Dynamic currency conversion. In this scam, which applies when traveling abroad, the hotel will automatically convert the amount of your bill into U.S. dollars. (At a horrible exchange rate.) Never mind that they could charge you in the local currency and have your credit card company do the conversion. (At a much better rate.) The credit card companies, not wanting to miss out on their cut, are now tacking on fees even if the hotel does the conversion to dollars. Most of the big credit card companies such as Chase, Citi and Bank of America tack on 3% for most of their cards. (Of the major card issuers, CapitalOne is a rare exception.)  Between the dynamic currency conversion and the credit card company, this can tack 8% or more on to your bill.
  • “Guaranteed” U.S. dollar rates. This is a related scam that I encountered at the Sheraton Centro Historico in Mexico City. I was guaranteed a rate of  USD $99 a night. But instead of charging my credit card in U.S. dollars, they converted the bill to Mexican Pesos. (At a horrible exchange rate.) The rate was about 5% worse than the credit card company rate. The hotel gets the benefit of protecting their revenue in a realtively stable currency while at the same time generating additional revenue by cheating people on the exchange. There’s really no reason that they couldn’t make the rate 15% worse or 50% worse.
  • The hidden room service markup. Room service is expensive. OK, we all know that. At the W Seattle, they disclose the delivery charge of $4 and the service charge of 22%. Fair enough; someone has got to bring the stuff up from the kitchen. What they don’t tell you is that they’ve also raised the menu prices of items $4-$5 above what they charge in the restaurant.

In many cases these charges don’t show up until you get your bill. If you’re in a hurry, you might overlook these charges altogether or not have time to contest them.

At least 3/4 of my hotel bills have some sort of unexpected charge on them. Often the discrepancy is $5-$15 — just in the sweet spot where about half the time I don’t bother to challenge them.

Unfortunately, I don’t see the situation with these gotcha charges getting any better. Faced with low occupancy and declining room revenue, hotels will be looking at every opportunity to extract more ancillary revenue.

Maybe they’ll even do what Ryanair’s CEO has talked about.


About Rakesh Agrawal

Rakesh Agrawal is Senior Director of product at Amazon (Audible). Previously, he launched local and mobile products for Microsoft and AOL. He tweets at @rakeshlobster.
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1 Response to The hospitality industry gets more inhospitable

  1. Alan says:

    Every time I’ve stayed at a ski resort (including Whistler), I always left my snowboard in my car. Am assuming you guys took the shuttle to Whistler and didn’t have a car? Anyways, yeah all the hidden fees when you’re traveling is really crappy. Probably a good thing you guys didn’t rent a car…

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