Nickel-and-Diming at the High End

It's often noted that affluent travelers, perhaps because they are already paying premium prices for room and board, hate nickel-and-diming as much, or even more, than travelers of more moderate means.

So what do a bottle of water, a towel and a phone line have in common? They are easily recognizable to frequent travelers as the weapons of nickel-and-diming, aimed against them almost every time they take a trip.

Resort fees, minibar charges and Internet access rates are the new battleground.

And what's particularly interesting is how few in the travel business are reacting with intelligence, intuition and common sense to a growing revolution among travelers.

Why is wireless free in the Toronto airport but $10 at Dallas/Fort Worth? Why is the Air Canada lounge in Toronto free, while American, United and other airlines want to hit you up for another $10 to use wireless in their lounges? The same is true -- sadly -- for most U.S. airports. O'Hare, LAX and Miami (the 2006 version of last flight out…) all charge to go online. But here's another reason to fly in and out of Fort Lauderdale: The entire airport is wireless -- and free.

Battles are now being fought between some more visionary vendors at U.S. airports and the airport authorities themselves -- because the stores and restaurants (and in one case, an airline -- Continental) want to offer free Wi-Fi to their customers. The airports are fighting them because they see the Internet as another source of revenue, a profit center. But what the airport executives don't realize -- and this is the commonsense part -- is that if someone gives us free wireless and we can actually sit and work at our computers while waiting for flights, we're much more likely to buy something to eat and drink -- realizing even greater revenue. It's a win-win for everyone.

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And then there is the wireless situation at hotels. It has become nothing short of a counterintuitive mess. Why is it that Hampton Inns offer wireless free of charge, and hotels like Ritz-Carlton and Four Seasons charge upward of $20 per day? If the Internet can be free in some city parks, why should hotels be allowed to gouge?

The answer is pathetically simple. What most in the travel industry have not yet learned is that the old paradigm of selling and marketing travel no longer works. It's not about pricing, or what the market will bear. It's what the market will value. I know dozens of people who wouldn't hesitate or flinch to pay $1,500 a night for a room -- unless you charge them $12 for a daily resort fee, for a towel and a beach chair that they rightly believe should be included in their rate.

Lately, the guests who are getting the angriest about such nickel-and-diming -- most of which is not fully disclosed by many hotels at the point of check-in -- are lawyers. In Maulding v. Hilton Hotels, the chain is facing a class action case, brought against 11 of its hotels, which challenges resort fees.

And LXR Luxury Resorts also had to fork out $2.3 million in a settlement with the state of Florida, which ended the practice of imposing automatic -- and undisclosed -- surcharges on guest bills (including that dreaded resort fee).

The bottom line here: The people who price hotels think it's all about being competitive on price, instead of being competitive on experience.

Try this sometime: Call a hotel -- any hotel -- and ask them to quote you their room rate. They will gladly do this, and just as gladly neglect to tell you about the occupancy tax, the sales tax, the "let's have the guests build our sports stadium" tax and other fun charges. They do this to be "competitive" on price. But when it's time to check out, and you see your bill, it could be as much as 18 percent higher than you planned. And who are you mad at? The city or municipality for imposing such draconian charges? No...you're angry at the hotel that didn't disclose them. Then there are the asset managers. These are the unseen, unheard but definitely not unfelt revenue czars who want to drive profits at any cost. And therein lies the biggest problem. No, it's not about price or cost, but hospitality.

In many cases, this short-term-profit mentality is forcing hoteliers out of the hospitality business and into supervising what these revenue managers define as an underperforming asset. In the short term, they drive revenue. In the long term, they drive us away.

The solution to this problem lies with you. It's how you negotiate a hotel room and all those other charges. This is not about denying the hotel its profit. It's about a definition of terms, full disclosure and reasonable pricing. Before you ever check in, force the hotel to disclose all of its extra, often hidden charges. Then let the hotel know what you will and will not pay for. A middle ground in the negotiations: bundling. Let the hotel know you'll agree -- that's right, agree -- to stay there if they put all the charges into one charge, bundling local and long distance phone fees with Internet charges, and oh yes, don't forget that stupid towel or the $8 plastic bottle of water. You might be surprised how many hotels will ultimately agree to that rather than lose you as a customer -- or worse, a repeat customer.