Is room service a 'rip off '?
In the late 1930s, the Waldorf Astoria in New York became the first hotel in the world to introduce the in-room dining service. At the time the concept was Uber-luxury: guests could order a variety of food and have it delivered to their doorstep in 30 minutes. In 1969, the Westin hotel chain took this concept in hospitality to a new level and began offering a 24-hour room service; customers could order caviar and lobster at 4 a.m. if they so desired.
Today, barring the new crop of budget / no-frills hotel, room service or ‘in-room’ dining (as it referred to nowadays),has become a standard at most three-star (and up) rated hotels. The most prolific users of room service are hotel guests who travel on business as opposed to those travelling for leisure.
One question that keeps popping up is why items that typically cost a few dollars, are so ridiculously expensive on a room service menu?
Why is a club sandwich and a soft drink US$ 43.29 (Rs. 8,000/-)?
Cuckooz, a London based apartment provider carried out some research on room service meal prices at London hotels. The results would drive most people cuckoo. The average cost of a meal per person, including service and delivery charges, when ordered through room service is US$ 43.29 (Rs.8,000/-). This was for a club sandwich, chips and a non-alcoholic beverage priced at $ 33.85, (Rs.6,262/-) which when subject to the 12.5% service charge plus the typical delivery fee of $ 5.22 inflates the price even further. Even the Holiday Inn - considered a more reasonably priced brand, listed the club sandwich at $ 21.76. (Rs.4,026/-).
At the beginning, the argument for such price discrimination was that guests, who are prepared to fork out $ 400 for a night in a luxury room, are probably willing to also pay above market price for eggs and toast when offered the convenience of delivery to their room. This line of thinking hasn’t changed much. But the biggest factor is that there is a willingness to pay. People often arrive at a hotel tired and hungry, and don’t have the energy or inclination to venture out into unfamiliar territory to go meal-hunting.
With such sky high prices, why do hotels lose money on room service?
Services that are offered 24/7 require a full kitchen staff to be ready and on standby around the clock. Taking this into consideration, it costs more to produce each item of food that it would, for a restaurant operating during dining hours with a steady flow of customers. Take the case of a hotel that kept kitchen staff awake through the night – only for an order for fries to come in at 2 a.m. from three guests on a drink binge and nothing else.
Whilst the number of hotel guests overall has risen in the last decade or so, the average yearly revenue per room has significantly reduced. Correspondingly, room service use is on a rapid decline. One might liken room service to other hotel offerings - like a pool, where one needs to have it available…even if very few use it. It’s the norm; if your competitors are providing it at the same room rate, you simply cannot stay competitive without it and it may also disqualify the property from receiving the 4 or 5 –star rating.
Way to go.
Way back in 2014, New York’s Hilton Midtown -- the city’s second largest hotel discontinued room service to all 2,000 of its rooms, citing high staff costs and inconsistent demand. They cut 55 employees from their room service staff, and implemented “Herb n’ Kitchen,” a refrigerator stocked with grab-and-go items.
Now, that’s one way to go!
Ilzaf Keefahs - writes on hospitality related matters that he is passionate about, and likes to share his views with hoteliers and customers alike.
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