Hotels copy airlines’ no-frills approach
To cut costs as consumers cut their travel spending, some hotels are taking a page from airlines, adopting a no-frills policy.
The next time you check into a hotel, don’t be surprised if the front-desk clerk and bellhop are the same person. Or if there is no clerk or bellhop at all.
To cut costs as consumers cut their travel spending, some hotels are taking a page from airlines, adopting a no-frills policy. New York’s Hilton Midtown, the largest hotel in the city with almost 2,000 rooms, will in August cease to provide room service and will lay off 55 room-service staffers, according to a recent report in Crain’s New York Business. A spokesman for the hotel says it’s “committed to placing qualified employees in alternate positions within the hotel, where possible.” Catering to the whims of 2,000-plus guests is expensive and time-consuming, says Andrew Young, editorial director of Travelzoo. In October, the Hilton Hawaiian Village also dropped room service. “Much like airlines, hotels are looking for ways to maximize ancillary revenue and reduce costs,” Young says.
Hotel companies are also expanding their “value-price” brands — that is, their hotels without room service. Case in point: Intercontinental Hotels Group is adding 454 more hotels (about 52,000 rooms) to its Holiday Inn Express line — the company’s only limited-service brand. Nowadays, “guests tend to be in and out of their rooms more,” says Kirk Kinsell, president for the Americas at IHG. As a result, he says, they order-in less often. And when they do order in, they don’t spend much: Room service revenue at U.S. hotels averaged just $3.33 per occupied room last year, broadly unchanged from 2011, according to PKF Hospitality Research.