Why companies are willing to lose customers for a small term gain.
Trends in the travel industry are usually pioneered by the airlines and major hotel brands. They have the customer base to test and what’s more, people need to fly and find places to stay. Their customer base is almost captive. They have the base to lose a few customers if their experiments don’t pay off. Once they have tested their solutions, that’s when smaller businesses can start to take inspiration from their ideas and apply them to their own businesses. This transition happened with online booking and revenue management and vacation rental businesses have been able to follow suit. However, there is a worrying trend from these industries of adding extra charges for altering the details of bookings and increasing pressure on optional extras.
We think that upfront and straightforward pricing has been an important part of the strong surge in people choosing vacation rentals over other types of accommodation. Hidden charges are a hated phenomenon of modern consumerism, yet are becoming almost ubiquitous in the travel industry. Find out why vacation rental managers should stay clear of this trend for applying extra charges.
These charges can feel petty and even duplicitous. They slow down the booking process and make advertised prices seem farcical. There may be optional extras that cost your business money that it is perfectly acceptable to charge for. Extras such as trips, excursions or products are a great way to build value into your business but just charging your guests to go through the booking process is what many guests and travelers are taking exception to. What has riled guests and travelers is applying a charge to anything that requires a decision from a guest. It smacks of a boardroom full of malevolent VPs rubbing their hands together and asking ‘Is there anything we haven’t charged for yet?’.
Choosing your seat on an airline is one such charge. Where once this was just a decision that would be made when you board the plane, the airlines have monetized this aspect and turned it into a commodity. Where before only a handful of people with special requirements would need to select their seats, the application of a charge has turned this process into an unnecessary cost and booking hurdle for the majority of their customers.
Opting for a non-smoking room is another charge that has baffled hotel guests. If these options are offered by the business, then they should be offered as exactly that, a choice rather than a tax. Wifi is another point of contention. Whilst standard in numerous cafes, bars and the majority of vacation rentals, hotels are persisting with charging a daily rate to access their network.
These are all things that are consistently charged for, despite being readily available for free elsewhere and can really add to a final bill. Having a certain level of choice and amenities should not be a paid-for privilege but a part of the customer service provided by a business. This process of applying costs wherever possible has even been dubbed ‘Hate-selling’. It presents the idea of a greater amount of choice yet it actually removes choice from the consumer. You have no choice but to enter the labyrinth of additional charges if you want to use the company's product.
Whilst the widespread adoption of these fees and charges amongst hotels and airlines suggests that they are profitable (they are set to generate a predicted $2.47 billion this year), the damage they are doing to consumer trust and respect is so far untold. They demonstrate a certain lack of respect for the customer. If vacation rental managers were to adopt this technique they would lose a unique selling point that they currently have over other types of accommodation. A clear and hassle-free pricing structure that gives guests exactly what is advertised, for the initially stated price. It also allows you to exceed your guests’ expectations. If you can go above and beyond you will ensure repeat business and loyal customers that are happy to pay the stated price.
For years people have been frustrated with these charges and fees but have been forced to pay them through necessity. Vacation rentals are able to separate themselves and become renown as giving guests far more than other businesses. By staying away from this trend for charges for any possible variations in a booking, they will retain their reputation as the highest standard of holiday accommodation for the fairest price.