Taking a page out of the airline industry’s ‘unbundled’ approach to airfares – some hotels are now charging extra for anything from towels to air conditioning. Airlines are earning billions from ancillary revenues, with a ‘pay for everything’ model. Hammered by the recession, the hotel industry is hoping to do the same.
Airlines are earning billions from ancillary revenues, as they ‘unbundle’ fares in a ‘pay for everything’ model. Hammered by the recession, the hotel industry is increasingly taking a page from the airlines’ book.
As Consumer Traveler reports, the most extreme example is Asian budget hotel chain Tune Hotels, which boasts the marketing tagline ‘5-star sleeping experience at 1-star price.’ For one very low price – basic rates start as low as $5 per night – guests get a room, bed and bathroom. Things like air conditioning, hair dryers, toiletries and even towels come at an extra cost. The chain is making its first foray outside Asia with a London, England location set to open in September.
Starting at 9 square metres, Tune hotel rooms are a little bigger than ‘pod’ or ‘capsule’ hotels like Yotel. Another player in the emerging (extremely) limited-service hotel category is easyHotel, from the company that runs budget airline easyJet. It also offers small rooms and showers, while additional services, including room cleaning, are optional extras.
One thing Tune does offer is a decent bed, which it says is custom-made by bedmakers who supply 5-star hotels – hence the ‘5-star sleeping experience’ claim.
Judging by reader responses to the Consumer Traveler story, there’s definitely a market for low-budget hotel offerings. “Well, why not?” wrote one reader. “I don’t mind paying only for what I want or need on a specific travel.” Another reader said: “Ultra discount hotels that have a low base rate and use the cafeteria system and the end product is still a bargain – absolutely!! $400+ a night at the Four Seasons and a charge to use a robe or a towel, no way, never.”
Another comment drives home how far some travellers will go to save a buck: “Well, I did it! I refused the towel, and used my bedsheet instead.”