The minibar is a metaphor for new efforts by hotels to charge more for ancillary services, reports David Churchill
IS IT FINALLY TIME to ditch the minibar? This iconic hotel amenity is among the most disliked by travellers who feel ripped-off by high prices; and then there’s the fact that it’s a constant cause of friction with travel managers over whether it breaches policy to have a packet of Pringles or a single Scotch stuck on the bill.
But hotels, surprisingly, are no great minibar fans either. They claim they are often more hassle than they are worth and actually lose money, given the high labour cost of servicing or capital tied up in installing new motion-sensitive technology to cut down on guests’ “cheating”.
Accusations that those staying in the room have consumed more than they admit to from minibars – or in extreme cases substituted tea or water for whisky or vodka – are among one of the major gripes for regular travellers who dislike having their integrity impugned by front-desk staff.
Hoteliers, in fact, are remarkably sensitive about the whole issue of minibars – they resent accusations of profiteering and are generally unwilling to discuss prices. Many hotels have dropped minibars altogether in favour of in-room fridges that guests can stock themselves, although decisions are often taken on a hotel-by-hotel basis rather than by a whole chain.
A nice little earner?
It is usually mid-market hotels and below that give up on minibars, with four stars and higher more likely still to utilise them. “All Radisson Blu hotels across the UK have minibars,” says Carlson Rezidor vice-president Philip Mahoney. “But the trick is to offer something a bit left-field – such as alcoholic ginger beer – alongside the standard items people expect.”
Bev King, former head of four-star Thistle Hotels, which embraced (and still does) minibars, has changed his mind at his new ‘affordable’ hotel venture, Z Hotels, the second of which opened in Victoria this June. “Most hotels use minibars as a way to make money, but they overcharge and therefore minibars rarely get used,” he says. “In each of our Z Hotels we provide complimentary bottles of still water because we don’t need to make money from everything we do.”
Other midscale hotel chains have adopted a more pragmatic solution, according to David Bailey, deputy managing director of TRI Hospitality Consulting. “Brands such as Hilton Garden Inn, Courtyard by Marriott, Holiday Inn Express and Hampton by Hilton offer a guest pantry or amenity area, alongside or as part of the reception where guests can buy goods and essentials, soft and alcoholic drinks and even ready meals,” he says. “It’s probably fair to say fully-stocked minibars are increasingly the preserve of higher-end, full-service hotels only.”
Yet despite of all the hassles and subliminal fears of being fleeced, it is also hard to deny the useful service minibars provide, especially for those who have been out on the town with colleagues or clients. According to major minibar manufacturer Bartech, the most popular products have been very consistent over this period: water, crisps and diet cola.
At your convenience
A Tripadvisor survey earlier this year of more than 1,600 travellers worldwide also found that two-thirds used a minibar when staying in a hotel, although over nine out of every 10 polled said they would use it more frequently if prices were “more reasonable”. But 51 per cent cited the convenience of a minibar as the chief reason for using one.
And for those who want to continue partying with the aid of miniatures, they have an instant supply without the need to wait for room service. This is when concerns about prices usually go out the window – as hotels know all too well. Nearly one in 10 of respondents in the Tripadvisor survey admitted that drinking alcohol usually led them to raiding the minibar when back in their room. This has encouraged some hotels to take advantage of the trait: the Jumeirah Lowndes Hotel in London’s Knightsbridge, for example, has previously offered a 30 per cent discount on minibar items bought between 10pm and midnight.
But whatever the benefits of a minibar’s contents to help counter – or continue – such libations, the question must still be asked: is it worth it? It is clear that while UK hotels – especially those in London – have perhaps performed better than expected during the financial crisis, they still face having to cope with travellers under expense pressures.
Although hotels are understandably reluctant to give public details of their ancillary revenues, latest industry-wide figures show that room-service revenues – which generally includes minibar sales – have been hard hit. Data from Hot Stats, part of TRI Hospitality Consulting, shows that in the 12 months to April this year room service beverage revenues were down by just over one third in provincial hotels and 40 per cent in London. Food sales were down by 15 per cent and 30 per cent respectively. What this suggests is that minibars may actually be a metaphor for a wider clamp-down on egregious hotel charges in tough times. “We are seeing more and more requests from clients for hotel billbacks, which suggests that companies are being much stricter about allowable expenses,” says Ryan Johnson, corporate land product manager for FCm Travel Solutions and Corporate Traveller.
Hotel billbacks are a pretty clunky way of reconciling hotel spending since, as an alternative to business travellers using either corporate or personal credit cards, it historically has involved a physical copy of the guest bill being faxed back to the travel management company (TMC) or hotel booking agency (acting on behalf of a client) for processing and payment. This is obviously rather cumbersome, as the details of the original booking have to be matched along with any extra charges incurred, before the TMC or agent pays the hotel and then recharges the client.
Critics of the system say that it may not capture all extra spending on ancillary charges that, according to specialist expense management company Conferma, accounts for an extra 30 per cent on average over and above the room cost.
But the raw management data generated by billbacks also gives a fuller view of total hotel costs – including ancillary charges – and is popular with some travel buyers (often from smaller companies) as it enables them to be more focused on what is actually happening out on the road.
“We can no longer put through one total on an invoice, as buyers want to see an itemised bill,” explains Johnson. “If the client has agreed a room rate for £200, including breakfast, when suddenly our invoice leaps to £280, questions are going to be asked.”
Johnson adds that while breakfast, wifi and parking are usually the ancillary charges clients are happy with, “laundry and minibar expenses are definitely not allowed and would have to be paid for by the traveller separately when checking out”.
Extra charges
The issue of ancillary charges in hotels may not be as acute as that involving the airlines, which began unbundling their all-inclusive fares in the late 2000s in response to the financial crisis. Hotels, which traditionally charged for some aspects of staying in a hotel, such as parking, room service delivery, business centre fees and so on, have started to emulate the airlines in charging extra for what they can get away with.
Paying for wifi, of course, is probably the most contentious issue as many buyers and travellers think it should be included in rates, although peer pressure is gradually forcing hotels to retreat on this. But any traveller who uses an in-room telephone for long-distance can still expect to pay eye-watering charges.
Yet hoteliers are moving towards charging for such services as gyms and swimming pools on the basis that as these are usually used by a minority of guests, they should pay extra. The underlying philosophy is that choice is now an increasing driver of customer behaviour in all walks of life, so if you want to swim in a hotel you can choose to do so – and pay for it.
But the bottom line is that it enables hotels to compete more effectively on price by masking the full cost of a stay. This is also now being embraced by a new generation of budget hotels, such as Tune and Easyhotel (see panel, previous page), which basically charge for everything extra apart from the room and bed.
But it is not just charging for a facility previously included that is the new strategy: hoteliers are also taking a tougher stance on enforcing existing charges such as cancellation or early departure fees, or adding credit card booking fees. The belief is that this is not only a less obvious revenue-earner, but it does not damage the guest experience in the same way as when they believe they are being ripped off by such extra costs as high minibar charges.
Minibars may not be universally loved and are clearly under pressure in an economy where every penny counts to some road warriors. But it may be a tad too early to signal their demise just yet.