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Special report: Budget hotels mimic budget airlines

Published: 01/12/2008 - Filed under: News »

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In these difficult times every pound counts. If hotels, just like airlines, can grab customers’ attention with dramatically lower prices, they stand a better chance of securing the business.

That is why some hotels have adopted the sort of pricing that has, until now, been the preserve of budget airlines. In other words, they woo guests with attractive headline rates but then raise extra cash by selling them extras. It means that amenities which traditional hotels would include as a matter of course are becoming “paid for extras” at some budget hotels.

Easyhotel (the budget chain founded a couple of years ago by Easyjet founder Stelios Haji-Ioannou) is believed to have started the trend. When Business Traveller sought a cut-price room in Central London for this Tuesday (Dec 2) Easyhotel’s website displayed a headline rate of £39. But on the actual booking pages we found that rate applied only to small rooms (6 to 7 sqm) without a window. The cost for a window would be £6 with another £14 payable if we wanted a larger room (7.2 to 9 sqm). (Both room sizes are tiny compared to what a traditional hotel would offer). Easyhotel levies a further fee of £5 if we wanted to hire a TV remote control. Pay by credit or debit card? There’s a further fee of £1.50.

In other words, Easyhotel’s headline room rate of £39 could easily become £65.50. It’s similar to the situation where British Airways provides amenities free of charge (credit card fees aside), while with Easyjet and Ryanair they are paid-for extras.

A spokesperson for Easyhotel said the idea was “to cut out unnecessary costs in order to reduce room rates.” But Easyhotel is a niche player in the UK. It has only a handful of properties. More important is Travelodge’s decision to adopt aggressive pricing. Right now its website promotes rates starting at £9 or £19 a room.  The chain currently has 20,000 UK rooms and, backed by Dubai International Capital, has ambitious expansion plans with 40 additional properties set to open next year. 

On December 2 a twin room at the Travelodge Kings Cross Royal Scot in Central London would cost £85. That’s great. But on the booking page I find £1 automatically added to my bill for what’s termed “cancellation insurance”. I have to de-select this option to avoid paying it.

Then I’m told that the hotel’s check-in time is 1500 but a £10 fee lets me check in between 1200 and 1430. Check-out time is 1200 I’m told but, again, a payment of £10 will extend my leaving time until 1400.

Do I need wi-fi? If so then Travelodge will sell me vouchers starting at £5 for an hour or £10 for a day’s access. Do I want any meals?  If so, I can prepay for breakfast at £6.75 or dinner at £8. Need a text confirmation? That’s a further 15 pence. And finally there’s a £1.50 fee when settling the bill by credit card (debit card payments do not incur a charge).

If all these extras are selected then the total cost comes to £132.25. Granted that’s a good deal less (when the meals are included) than what a conventional hotel would charge but it’s substantially more than the original price.

A Travelodge spokesperson defended the chain’s pricing policy, “Our whole rationale is to offer the lowest rates for our customers. That is why we can offer rooms in some cases for as little as £9 a night. We don’t want to penalise guests [by charging] for the services they might not use.”

So far budget rivals like Premier Travel Inn, Express by Holiday Inn and Ibis haven’t followed suit. But who knows? When Ryanair started charging for extras it was widely criticised at the time. But some carriers have followed.

So what’s next for these budget hotels? If airline experience is anything to go by then be prepared to pay more when booking off-line, for the tea and coffee tray, or for those more desirable “end rooms.”

For more information go to easyhotel.com, travelodge.co.uk.

Report by Alex McWhirter

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