What’s the easiest way to change time-honored expectations? With dollar signs.
Humans are creatures of habit. Even little kids gravitate towards the “patterns” of daily life such as bedtime rituals.
These forces are what make it so challenging for companies and brands to introduce changes that go against habit.
We’ve seen this play out recently in two segments of the travel industry: airlines and hotels.
Challenging in both cases … but the changes in one are being accepted, while summarily rejected in the other.
Let’s start with the initiative that’s flamed out. This past November, Hilton Worldwide launched a pilot at a number of its hotel properties where it began charging guests a penalty of $50 if a reservation needed to be canceled any time after booking.
The rationale for the initiative was the notion that hotels should join the rest of the world when it comes to the way its products are sold. After all, for most any product, once someone purchases it they’ve committed to buy it.
Not so with hotel reservations, where über-flexible cancellation policies have been the modus operandi seemingly forever.
The way that some in the industry see it, the practice of hoteliers tying up inventory at no cost or penalty seems illogical.
It’s why some chains have introduced stricter 24-hour policies wherein the first night room cost is charged to customers who fail to cancel before midnight the day before their arrival, instead of the afternoon of their planned arrival.
But Hilton’s pilot went even further than this, because the cancellation fee would be charged regardless of when the cancellation was requested – even if it was days or weeks before.
Predictably, customers totally hated it.
So much so, Hilton canned the policy less than three months in.
Putting the best spin on things, CEO Christopher Nassetta remarked that Hilton “did get some nuanced intelligence out of the experience.”
Perhaps that intelligence was not quite as nuanced as Nassetta infers! At the bottom of this customer fail is a fundamental axiom: If you mess with time-honored practices that people have come to expect as the normal course of business, you do so at the risk of major blowback.
But we have another recent developing in the hospitality industry that points to a different result. In this case, it’s in the passenger airline segment.
Delta and a few other airlines have been successfully rolling out a new class of travel euphemistically called “basic economy” or “super economy” class.
[Others call it “economy minus” or “last class” air travel.]
Essentially, what the airlines are now offering are the lowest available airfares that will get travelers to their place of destination – and that’s it. All of the basic amenities available to traditional coach class travelers are missing.
If one chooses to travel “super economy,” here’s what’s in store for them:
- Seats with less leg-room than coach (if that’s even possible)
- No free snacks or drinks
- No free in-flight entertainment
- No free carry-on bags
- No advance seat assignments
- No itinerary changes or ticket refunds (even with a service charge)
- No frequent flier miles
For giving up all of this, customers are being quoted prices for air travel that are so low, they rival ground transportation rates.
But for travelers who don’t have to worry about changes in their travel plans … don’t care about in-flight comforts … or don’t travel frequently and therefore find frequent flier programs irrelevant to their personal situation, the tradeoffs appear to be worth it.
Because the passenger airlines need to make physical adjustments to their planes in order to offer “super economy” class, a lot is riding on the consumers’ acceptance of these tradeoffs. So far, Delta Airlines has found sufficient success with its pilot program to plan for its expansion. And United and American are now getting ready to offer their own programs.
The key difference between the airline and hotel pilots boils down to providing a price incentive.
Even with time-honored or habitual practices, if you make it financially lucrative enough, you’ll get the behavior changes you’re seeking. Bottom-line, that’s the bottom line.
Speaking personally, seeing as how I feel strapped for space on airline flights already, I doubt I’ll be traveling “super economy” class anytime soon, except perhaps on very short hauls.
But I know for a fact that I’ll never book a room that’s subject to a cancellation fee.