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Wouldn’t a Simple Price Adjustment Save the Minibar?

January 2, 2014 at 11:02 AM | by | Comments (8)

For the first time since its introduction decades ago, we saw the consumer push back against the minibar in 2013. Chalk it up to nostalgia, but a small part of us was surprised to see such a staple of the hotel industry begin to crumble. But nostalgia is all the minibar could hold onto, because the logical part of our brain was not surprised at all.

When the news first broke, we told you how we thought the hotel industry had gone about minibars all wrong with its decision making, jacking up the prices, installing electronic sensors that botched up billing (over a $2 can of soda, no less), and charging a fee to convert it to fridge space when guests decided they’d rather bring their own snacks as an alternative.

That said, explained, and accepted, it is hard to feel bad for hotels. What did they think was going to happen? Did they really think guests would flock to the fridge for $5 candy bars? An all-out focus on profit margins turned what could have been a useful, convenient amenity into a useless, don’t-even-look-at-that-thing waste of space.

We always try to remain optimistic that we can influence positive change. The truth is that we want a minibar in the room, we just don’t want one in its current state. We’d love to have a beer while we’re getting dressed for dinner or a small snack when we arrive from the airport, but we don’t want to feel ripped off in the process. Maybe there’s a chance that consumers and hotels could meet in the middle and find a better price point. After all, isn’t that all it would take?

For example, suppose you opened up the minibar and there was a beer in there for $3. Forget for a second about whether it would be profitable for the hotel. Wouldn’t that be… great? Or how about a pack of nuts for a dollar? Wouldn’t that be… reasonable? Or suppose that the hotel did away with $5 Snickers bars and put fresh fruit – like apples and oranges – in the minibar. We’re not talking the overpriced banana approach as made famous by Starbucks – we’re talking reasonably priced fruit, 25 or 50 cents apiece, right there in the fridge.

In other words, maybe the minibar doesn’t have to be an all-out money-making machine for the hotel. Two groups have actually already experimented with similar concepts. Some Andaz Hotels include all non-alcoholic products from the minibar in the room rate, and Kimpton Hotels lets its InTouch guests "raid the minibar" for a mere $10.

This is exactly the sort of compromise we're looking for -- maybe if the minibar can just be viewed as a small-margin scheme that is concerned more with customer satisfaction than profitability, we'll end up with an in-room perk guests will actually take advantage of instead of avoid.

[Photo: HotelChatter]

Comments (8)

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Most

Most hotels actually lose money on the mini bar, even with the prices being "so high". You have to pay for the labor to check and refill the mini bar, the cart, the mini-fridge for every room, the product, and the printing of the price lists. In my experience most hotels aren't out to gouge people with high prices in the mini bar, they are just trying to break even on it.

Would fresh fruit be awesome in the mini bar? Sure. Until you try to figure out how to do it operationally. You now have to go into each and every room to check the freshness of the fruit, and who knows what the previous guest did to that fruit..


Re: Most

Thanks for your comment. I have a question.

You say, "In my experience most hotels aren't out to gouge people with high prices in the mini bar, they are just trying to break even on it."

Do you have experience working for a hotel, or are you just speculating? I'm finding it hard to believe the cost of putting a mini bar in a room is so high that it warrants $5 candy bars, but I'm open to being corrected. I just have never seen proof of that.

All-inclusives monitor guest fridges on the daily successfully, a service that is included in the rate, so high prices on the products is not the only way to cover costs.


Mini Bar operations done properly

I worked in minibar departments of several hotels over the years and I can report that the losses hotels are making on minibar operations are huge.

Many guests (I am sure not you ;-)) are consuming items without reporting them, drinking beverages and refilling the bottles with water, eating the snacks and re-closing packaging with tape after filling them up with newspapers etc etc. I have seen it all.

Tour groups and airline lay overs are the biggest culprits where entore minibars get raided upon check-out and the hotel has no recourse as tour operators and airlines do not take responsibility!

As minibar attendants, we are able to do around 100 to 120 rooms a day. If the minibars are non-automatic, we have to check all the rooms. 500 rooms requires 4 attendants. If the minibar department is run by housekeeping, the losses are even higher. There is no inventory control and unfortunately, staff help themselves eagerly as well, as they know management has no control!

So to compensate for these huge losses, hotels tend to charge a lot more for minibar items than they should!

The only way to counter these losses and provide a good service to guests is to install automatic minibars.
Provided that management installs an area in them where one can put personal items, they work a treat!
There is a timing delay of around 30 seconds, allowing a guest to pick up an item and replace it.

We cut staff time back by 75% and if managed properly AND there is a free space, it is the only answer to the perpetual issue of minibar losses and frustrations.

As soon as these overheads of labour and huge inventory losses are compensated, hotels can lower their selling prices! It is simple and effective!


You don't know what "luxury" means

First of all, the fact that a few hotels removed their minibars doesn't equate "the death of all minibars in the luxury hospitality". Working in this industry, I can promise you your statement is false.

Second, the automatic minibars arrived about a decade after regular minibars were in place. The prices were already high and if you knew what the automation brings to hoteliers and guests, you'd understand that the item prices actually decreased, instead of "increased by $2" like you mentioned. This is non-sense.

Finally, in what world do you live? Where have you seen a $3 beer and a $1 candy bar??? You can't even find these prices at your local 7eleven but you expect them in 5-star luxury hotels? And apples and oranges in the rooms ...? Basically, you expect a 800-room hotel to have fresh fruit (for sale) available to the guests, waiting for them in the rooms?

It seems like this is the second article you write about minibars and the second time you seem very confused about reality ... you should write about something else.


Yes

I've worked for hotels for the past 8-10 years, both in the front office and currently as a Director of Housekeeping I've also worked for several different hotels in different markets. Not one of these hotels was "raking" in huge profits from minibar, the goal was simply to minimize the loss, and if you actually made a couple hundred bucks, it was a GREAT month.

nal

Also regarding the automated systems, they are great and can help minimize cost being able to cut back the labor and not checking every occupied room everyday. But the one downside is it does have fairly large capital expense, which most hotels can't justify.  

Then why?

If no one likes them / uses them and hotels lose money, why on earth do they exist? They are a waste of already limited space.

$38 half bottle of wine

Yeah, Kimpton definitely does not let you raid the mini bar for $10. I'm an InTouch member and got the $10 coupon. When I checked out of Hotel Monaco (fab hotel by the way, I absolutely loved it otherwise), I was told I would get $10 applied toward the $38 charge for a half bottle of California chardonnay. I mean! And there was no mini bar price menu in the room.

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