If there's one thing the airlines' recent profit boom can teach us, it's that micro-charges work. They unbundled services such as checked baggage, meals and blankets, and as a result their bottom lines soared. One lodging chain now entering the Western market, Tune Hotels, is applying that price structure to hotel rooms.
You probably haven't heard of Tune because you don't travel much in Malaysia and Indonesia, where there are 11 branches. But the brand has big expansion plans for 100 outlets by 2015, and it's starting with one in London, just a 10-minute walk east of the Big Ben clock tower and the London Eye.Prices start at £35, or $55, in low season. Everything you use adds a little more to the bill. That includes towels, use of the air conditioner and hair dryer, housekeeping, the safe beside the bed, Web access, soap, toiletries and TV. If you don't use it, you don't pay for it. There's never a minibar and never an in-room phone. In fact, 11 of the 79 rooms in the London property don't even have windows. Those will cost you £10 ($15.75) more.
The way Tune puts it is: "You get charged based on your consumption." The base rate for the room is absurdly low, but all that really pays for is the bed, even if the chain swears it's a really comfortable one. For that "five-star bed," it promises, you pay "a one-star price." You also have a private bathroom, including a "power shower."
When you're in the room, your key card fits into a console that activates the electricity and reduces the company's overhead. That's a feature common to hotels just about everywhere except America.
On a February, 2011 night when Tune charges a base rate of £45, a nearby Marriott's price starts at £289.
The video below, featuring attractive Malaysians frolicking and jumping on those "five-star" beds, explains the concept further and shows that the rooms, while hardly trendsetting, are also hardly Spartan. They're perfectly adequate for a space in which people spend most of their time unconscious.
Added-fee hotels are picking up steam in Europe. This summer, I wrote about Lindemann's, the upscale-budget mini-chain in Berlin, where customers select their add-ons such as wi-fi and breakfast at the moment they make their reservations.
The leader of the Tune concept is Tony Fernandes, a scion of entrepreneurial maverick Richard Branson and the CEO of the massively popular low-cost airline AirAsia.
Fernandes promised HotelChatter.com that Tune will be coming to America, but that was well over a year ago. Instead, in the late summer he chose London for its first Western stake (although that may be because Fernandes is an avowed fan of the city's West Ham football club).
Will the American hospitality industry be eager to adopt the micro-charging model as its own? Probably not quickly, since they're already getting away with obscuring many extra charges and burying add-on costs into insidious resort fees. This pay-for-what-you-use profit model is much more suited to Asia and Europe, where many services are seen as being much more transactional, and less about pampering, than the way we tend to view them here.
Then again, the extra-fee airline model has its first big success in Europe, too, with no-frills carriers such as Ryanair. And when that pricing structure finally swept America, it flooded consumers like a tsunami.
Tune Hotels Copies Airlines and Charges Fees for Soap, Towels, Even Air Conditioning