For years, at least until the onset of the COVID-19 pandemic, the airlines lived large off ancillary fees. Those extra charges for seat changes and extra bags paid off handsomely.
Now Tyler Morse, owner of MCR Hotels, has decided to experiment with his own version of ancillary fees, according to the Wall Street Journal.
In exchange for cutting room rates, MCR is adding a la carte pricing for services that include use of the hotel pool for $25; early check-in or late checkout for about $20; as well as the use of the fitness center and having breakfast.
Morse said he is lowering the nightly room rate by ‘varying degrees,’ as he tries out the new philosophy at about a dozen hotels, including the TWA Hotel at John F. Kennedy International Airport and the High Line Hotel in Manhattan.
“Not every guest wants every product, and they don’t want to pay for something they were never going to use anyway,” Morse told the WSJ. “Other owners are fully behind me, but there’s always a fear of change.”
Hotel Business magazine last year ranked MCR as the fourth-largest hotel owner in the country by room count. The New York-based company currently owns nearly 20,000 rooms, Mr. Morse said.
The Journal noted that the hotel industry is by nature slow to adopt significant changes, and many properties lack the technology to implement an a la carte pricing system.