Tag: hotels

The Coupon Book

JulianLeave a comment

The goal of the game is to make money. You make more money by giving some away, then charging for what stays scarce.

I’m at the second all-inclusive resort of my life. So why do I feel nickel-and-dimed?

(My family comes together for one of these every summer now, which is a lovely experience. I’m having a great time with great people. This feeling is not a particularly negative impact on my experience; I’m simply enjoying the process of analyzing it.) 

It started at check-in, when the concierge handed me a coupon book. He flagged one asterisk: the $50-off coupon for the resort store needs a purchase of at least $100. I laughed and noted I wouldn’t wouldn’t be using that one.

A coupon book. At an all-inclusive. The whole premise of the place is that I already paid, so nothing else carries a price. A coupon is a price dressed up in a faux discount. The coupon book is a store smuggled into a building labeled “no stores allowed”. 

* * *

Once I noticed the first coupon, I couldn’t stop. $50 off a single spa treatment, which made me wonder what a spa treatment costs. I found the menu advertised in the bar and scoffed: treatments start at $229. I can get an excellent massage in the US for half that, and that’s paying US labor prices, not whatever a masseuse earns in central america. 

This is couponing the Bed Bath & Beyond way: float the sticker high, then hand back a slice, so the discount feels like a gift instead of a markup you sidestepped. It’s comparison control, the price game I keep coming back to. Anchor the number at $229 and $50 off reads as generous. Nobody mentions the seller number that should orient their side of the price: their marginal cost of providing the service. 

And the asterisk gives that number away. The same way Chipotle running a 2-for-1 tells you a burrito nets more than 50%, this resort’s $50 off of $100 in the gift shop tells me the same. They’re not discounting into a loss on purpose. If they can afford to give it back, they were charging too much to begin with.

* * *

The second move is the paid upgrade, and it bothers me more, because it breaks the frame on purpose. (At this resort, that’s the “Star Class” upgrade: your room and food become slightly nicer, and you can book Star Class-exclusive dinner tables.) The whole reason to buy an all-inclusive is to delete the transaction. No prices on the menu, no small voice doing math at dinner. If I wanted the experience of paying for something nice, I would have booked a place where I pay for something nice. The upgrade sells me back the exact friction I paid to be rid of.

* * *

So why build it this way? Why sell “everything included,” then spend the week selling more?

My best guess: once everyone holds the same all-inclusive wristband, everyone wants the same scarce things. The 7pm table at the good restaurant. The shaded poolside chairs. Put a few hundred people on identical footing and they start competing, and anywhere people compete over something scarce, there’s money in tilting the field.

So the resort sells you a basic entry ticket. Then it sells weapons to both sides: the upgrade that jumps the dinner queue, the tier that reserves your chair before dawn. What you’re buying, on top of the vacation, is a position in a contest they built.

* * *

I don’t write any of this with a clenched jaw. I came here to stop running the numbers, and on a vacation the only points worth counting are relaxation, enjoyment, and connection. I’m racking those up, surrounded by people I love. I just can’t switch off the part of me that wants to see the machine.

And the machine is simpler than it looks. If something is free, someone finds the version of it that isn’t, and sells you that. If free, then freemium. Even here? Especially here.

Two Service Industries

JulianLeave a comment

The waiter has two jobs. So does everyone in the service industry.

A waiter who doesn’t bring your food has failed. A waiter who brings your food but ruins your experience has also failed, just in a different way. We refer to both of these elements with the same word: “service”.

Two completely different failure modes, one job title. The waiter sells a result (correct order arrives, hot) and an experience (the welcome, the rhythm of the table, the small talk, the upsells that don’t feel pushy).

Most service jobs are like this. A masseuse sometimes sells a result (your glutes stop screaming) and sometimes sells an experience (60 minutes of affectionate touch from a fellow primate). A hotel sells a result (somewhere safe to sleep, proximity to the places you want to be, a gym, food without leaving the building) and an experience (the pleasantness of all of it).

The word “service” hides two different products. Once you notice this, every purchase decision gets easier, because you stop accidentally paying for the one you don’t want.

(People miscategorize their purchases all the time. Doctors, for instance, are in the service industry. Personally, I only value “bedside manner” insofar as it impacts my medical results, generally through team cohesion.) 

The Hotel Switch

This idea showed up today while I switched hotels in Budapest.

Hotel 1 was the Kimpton BEM. $340 per night. Sauna, gym, restaurant, bar, room service, a quick walk to the Danube. A small room. No refrigerator. Paid laundry. Beautiful experience, modest result.

Hotel 2 is an aparthotel. $61 per night. A one-bedroom apartment (separate bedroom and living room). A kitchen with stove, oven, microwave, dishes, refrigerator. A laundry machine. One block from the biggest ruin bar in Budapest.

For the same money, I’d take the aparthotel every time: twice the space, a real kitchen, a better location, an in-unit laundry machine. The Kimpton costs roughly 5.5x as much. At that price, you’re buying 1) The experience of being attended to, and 2) Reliability (of room, food, and experience: Kimpton is a reputable brand.

The Preference

I’m probably odd in that I almost always want the result.

I prefer my infrastructure solves specific needs. If it solves the need, the work is done; the pleasure of the experience is secondary to the solving of the problem.

The key exception: play. I don’t play golf to get the ball in the hole. I play golf to play golf. Play is the rare context where the experience IS the product, and I’m clear on that going in.

Perhaps some people see visiting a hotel as play. I see it as infrastructure. 

The Cost

The aparthotel model isn’t free. You have to learn it. Photos lie. Hosts ghost. There’s no front desk at this residence: if you fail their check-in process, their automated system won’t email you the login code.

The variance is real: I once caught a nasty cough from a booking.com stay due to mold on the walls.

The result-first approach trades reliability for upside on the days nothing goes wrong. Most days, nothing goes wrong. And my skill at spotting good residences has improved. But I improved… by making mistakes.

The Result

As I write this I’m on the couch in our new living room, and Partner is squishing my feet. My feet hurt because the Kimpton was a 45-minute walk from the lively downtown area (from which Partner and I walked back to the Kimpton at 2am last night).

I’m enjoying the experience of a feet-squish from someone I love. Still, I’d rather we jumped to the result where my feet stopped hurting.