What do you think of when you hear the name Hilton? No, not Paris Hilton, but the Hilton hotel chain? Do you think upscale, comfort, impeccable service, and plenty of amenities? Hmm. So did I, until I stayed at the downtown Hilton San Francisco.
The first morning when I went downstairs to the highly touted spa/exercise facility I was surprised to learn that it was my lucky day! I get to pay an extra $15 for the privilege of sweating on their treadmills! The facility was quite nice, with ample equipment. Was it worth the $15 to me? Iâ€™m not sure I want to pay extra for such punishment! Later that morning I went to their business center to print out some directions to my morning meeting and was again surprised that the privilege cost me $4.50–four dollars for 2 minutes computer access and $.10/page printed.
This practice is called â€œunbundling of servicesâ€, and it enables a firm to charge lower prices by separating out previously bundled services that not all customers value, thereby lowering the cost of goods or service delivery and charging only those customers who truly value the services. It is a great idea in concept. However, it is hard to implement because nobody likes having things taken away from them, like myself in this case.
Hoteliers are facing significant price pressure, especially with the decline of traveler loyalty, proliferation of discount services like priceline, and the wide availability of rate comparison tools. The question is whether or not this particular unbundling of services that the Hilton Hotels is attempting is going to allow them to reduce rates without further sacrificing loyalty. As it stands, I think they have sacrificed loyalty. They could win it back by offering a business traveler special that includes internet access, business center usage, and club usage for an additional $15-20 or so. Iâ€™d pay it if it were part of my standard hotel rate so I donâ€™t have to explain the individual charges on my expense report.
In the meantime, Iâ€™ll go back to Marriott.
What do you think? Instead of being “nickel-and-dimed” to death, what types of services are you finding are being unbundled such that you feel you are “dollared-to-death”?