Monday, August 8, 2011

Hotel Chutzpah: A Guest Bites Back

Did you hear about Rodney Harmon, the Californian who has sued Hilton Hotels Corp. for charging him 75 cents a day for a newspaper he didn't ask for? Silly, huh? Guy gets a copy of USA Today left outside his room, he doesn't read it, so he sues - a sign 'o the times in a society far too eager to litigate, right?

Not necessarily. Not entirely. Suing is extreme, to be sure. But Harmon's lawyer has been quoted in press accounts as saying the ticked-off hotel guest was riled by the sheer chutzpah - effrontery, presumptuousness - of a hotel charging for unwanted services. Hilton, like many other hotels, allows guests to get refunds on unwanted newspapers at check-out. But the catch is, you have to read the fine print and know, first, that you are being billed, and, second, that you can get that money back if you ask. Most of us are in a hurry at check-out and aren't that attentive.

This is small change, you rightly figure, but it's the principle of the thing, too. Businesses often do put the burden on the consumer - rather like having to find and check the 'unsubscribe' button at the bottom of unsolicited e-mails. The business gives the chore to you, and, hey, maybe you'll forget to do it.

Undergirding this seemingly petty squabble is something old and something new in business.

The something old is a practice that allows publishers to inflate circulation and thus charge higher rates to advertisers. USA Today gets half of its daily circulation of 1.78 million copies by cutting deals with hoteliers, according to Forbes writer Jeff Bercovici.

Back in the day, I covered media for the old, Hearst-owned San Francisco Examiner, and one of my steady sources was newspaper financial analyst John Morton. Forbes talked to Morton, who estimates maybe 90 percent of the charges on hotel bills for newspapers go unnoticed, allowing hoteliers, and the paper, to keep the change. It adds up. Bercovici estimates those hotel copies generate $82 million USD a year in circulation revenue.

This could be done fairly, as some hotels do, by asking guests at check-in if they want a newspaper and telling them then that they will (or won't) be charged.

The something new in business? Fees and surcharges for everything. Airlines charge for checking bags, for carrying bags on the plane, for sitting in aisle seats, for ordering meals in economy class and so on. They spin it by calling it customized or even bespoke service. But loss-making airlines need the money in a world of relatively low fares and high fuel costs. They still need to disclose fees more transparently at booking, but there is a rough market justice governing airline fees.

But artful, near-invisible fees at hotels and elsewhere in the travel "space''? Not so much.

It's enough to make a guy sue.

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