Goodbye, Room Service; Will We Miss It More Than Clean Linens?

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The Hilton Midtown made headlines last week when the famed New York City hotel opted out of room service. Beginning in August, the 2,000-room establishment will cease all round-the-clock food and beverage delivery service.

The hotel has said that the reason for the change is that fewer customers are taking advantage of the service. But industry experts have noted that there might be other reasons, such as the high cost of labor on a low-profit service.

Travelers shouldn't let woes about low-profit food and beverage services distract them; the hospitality industry is doing just fine. According to the recently released 2013 HOST Almanac, which studied the income and expense statements of nearly 6,000 U.S. hotels, the industry had income of nearly $162 billion, with house profit of $58 billion and operating expenses of $40 billion. The average nightly rate per room in 2012 was $159.52, and each occupied room generated an average of $244.76 in total revenue for the hotel.

No Soup for You!

The elimination of room service from traditionally full-service hotels is not a new notion.

At the 2010 Lodging Conference, a session entitled "Owners Talk About Operational Issues" was filled with hotel owners discussing how food and beverage service was a losing game. The ideas discussed ranged from eliminating room service to offering takeout instead of dining options to removing food and beverage services entirely. Over the past several years, hotel sundry closets have expanded to include more cafeteria-type items, with even luxury chains offering "grab-and-go" items.

While the occasional room service splurge can be a delicious luxury, for families worried about their travel budget or those looking to get the most from their hotel stay, those overpriced meals are a poor choice. Far better to find a local grocery store or farmers' market and dine al fresco on the steps of a local attraction than shell out and dine from inside.

Some Travelers Still Need In-Room Coffee

With the rise of self-service hotels, nontraditional accommodations like house-swapping, Couchsurfing and Air B&B, or even the old-fashioned nightly rental ads in large urban areas on Craigslist, the full-service traditional hotel model itself is no longer the only option for leisure travelers, families, backpackers, or solo adventurers.

But for business travelers, especially those for whom traveling is their business, the elimination of room service is alarming.

Kat Von B, an undercover luxury hotel reviewer who goes by TravelingGreek on Twitter, says "All the hotels I stay at offer room service, an amenity I require. Usually, I am traveling on business and appreciate room service in the morning for coffee; sometimes if I've had a long day, I order in. It is a luxury that makes travel comfortable." Von B says she orders room service nearly every day, and coffee, at minimum, is essential before starting the day.

More Green, Less Service

Call it cost-cutting, call it a decline in consumer demand, call it an attempt to circumvent labor unions. Eliminating room service in favor of self-serve food options isn't the first time the hotel industry has instituted a wide-scale change.

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It was only a few years ago that hotels were asking customers to opt out of daily linen changes; now it's de rigueur. In some hotels, linens aren't changed unless a guest specifically asks.

Like many so-called "green initiatives," the hotels claim it's for the environment, and there's no doubt that less laundry equals less water consumption. But the cost benefits are immense; when travelers select a hotel with so-called green features, they think they're helping save the planet, but they're actually also helping hotels save money.

According to the Green Business Bureau, hotels with a recycling program save 50 percent on waste management; shampoo and soap dispensers save more than $16,600 per 100-room facility; vending machines with occupancy sensors save more than $400 a year; thermostat controls save 14 percent on energy bills; and a key card management system saves 25 percent on energy.

With so many other ways available for hotels to cut costs, Von B warns against cutting something so visible. "Customer service is so important in the competitive hotel industry," she says. "Guests want more, expect more, and upscale properties need to realize that sophisticated travelers have options and will go elsewhere."

Molly McCluskey is a contributor to The Motley Fool.
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