'Stealthflation' and 'Surge pricing' in the hospitality industry
First there was no ‘free lunch’. And now comes its sequel; there is no ‘free relish’.
Steadily and stealthily, firms have found many ways to raise prices by embracing ‘unbundling’ – a technique first introduced by low-cost airlines when they began charging ‘extra’ for checked baggage, in-flight meals and beverages, which then spread to levying a fee for seat selection, and for cabin baggage that did not conform to the specified size.
Things have since gone ‘over-the-top’ one might add, especially with some airlines now applying a ‘technology development charge’ which for some reason is dependent on the distance traveled by one’s flight. It seems the further you wanna fly, the harder it gets for the machine to deliver that long-haul ticket across to you. Honestly, what a load of pretentious bollocks!
It gets even more ludicrous when some airlines charge for printing the boarding pass and for that blanket to keep you warm when flying. Hope they don’t levy a ‘pay-to-use toilet fee. Don’t get caught out by surprise should at some turbulent point in time; airlines request passengers to cough out additional dough for that oxygen mask…in the event of an emergency.
The practice of unbundling has now been taken on by restaurants and hotels, with certain resorts levying a ‘check-in’ fee and take away eateries a ‘packing fee.’
It appears more and more McDonald’s chains are now charging for various sauces – leaving its fans fuming by this new policy. While it was increasingly common for restaurants to tack on extra charges, such as for bread and water, having to pay extra for condiments and a spare plate is threatening to be dining out’s new normal. A case of there been more flavours than ever, but less access to them – unless one is willing to pay!
Restaurants don’t operate by giving any food away for free. Fair enough. They have to incorporate the cost of that free product into their food cost somehow. But that should not mean incorporating the free product into the cost of the menu item where it’s already incorporated.
Diners beware; it’s wise to read the fine print on your check. A Los Angeles restaurant came under fire after a prominent podcaster took issue with an unfamiliar surcharge on his guest check: an extra 4% fee automatically added to the bill to help fund the workers' health insurance. The owner responded that his restaurant offers to remove the charge at customers' request, a fact it prints on every guest check.
Britain's biggest pub company announced that pints of beer would cost more in the evenings, weekends and during sporting events. The company is about to adopt surge pricing, meaning the cost of drinking will rise at popular times with drinks prices going up by 20 pence. Prices will return to normal at less popular times.
Does it now mean that wanting to drink when everyone else does is punishable or that popular times translate to ‘Unhappy Hours’? Wonder how many will say ‘cheers’ to that!
Shafeek Wahab –Editor, Hospitality Sri Lanka, Consultant, Trainer, Ex-Hotelier
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