During a National Business Travel Association panel comprising the CEOs of Starwood, Southwest Airlines, Travelport GDS and Carlson Wagonlit Travel last week, CWT's Douglas Anderson indicated he wanted some water.
Moderator Trip Davis, chairman of TRX, turned to Starwood's Frits van Paasschen and said, "You're in the hospitality business. Could you grab one of those bottles of water and pass it to your teammate there?"
As van Paasschen handed the bottle to Anderson, he said, quietly, "That'll cost you."
It got a good laugh -- perhaps not as hearty as if van Paasschen were CEO of a legacy airline -- but it also brought to the surface an issue that became a leitmotif during the NBTA's International Convention and Exposition in Houston from Aug. 8 to 11.
Whether one calls it unbundling, ancillary fees or nickel-and-diming, the practice of retailing marked-up amenities or charging for items or services that used to be included in basic pricing was very much on the minds of conference delegates.
In his remarks before lunch on the first full day of the conference, Sabre CEO Sam Gilliland said, "I'm not here to criticize airlines for charging fees [for unbundled services]. It allows customers [the opportunity] to buy themselves out of an otherwise bad travel experience."
A bad travel experience, of course, might not be limited to flight-related activity. In a discussion I'd had earlier that day with Thorsten Kirschke, executive vice president and COO of the Americas for Carlson Hotels, he said he had been thinking a lot about what he calls "travel empathy."
"From extra pay for luggage to lost luggage to body searches to taxi drivers taking routes that will add $5 to the fare, travel is far from being a joyful experience," Kirschke told me. "Today, hotels do not just provide food and shelter but must grow the number of services available on a 24-hour basis. Arriving at the hotel should put you at ease, and we're addressing that. The approach extends not just to services, but also the architecture, the internal design, the sounds, the smell -- they all play a role in the totality of the guest experiences."
Radisson, among other brands, is in Kirschke's portfolio, and he has a unique opportunity to drape the brand in travel empathy initiatives because it is undergoing a worldwide upgrade.
On a global basis, Radisson has suffered from brand inconsistency: European Radisson properties are positioned as much more upscale than those in the U.S. The inconsistency has been a drag on the brand -- Europeans who book into American properties are disappointed, and Americans who might like the European model won't give it a chance because they assume they know what the Radisson experience is like. Getting the brands in sync, Kirschke believes, will result in "a multiple of tens of millions of dollars."
The new empathetic brand promise includes lots of extras: free Internet service, complimentary "Grab & Run" breakfast (coffee or tea, fruit and energy bars), checkout as late as 6 p.m. (subject to availability) and a 100% guest satisfaction guarantee ("We'll make it right or you won't pay.")
It would be nice if travel empathy add-ons like this become the widespread reaction to unbundling, the yin to ancillary fees' yang. For now, you're seeing isolated examples such as Southwest's "Bags Fly Free" promotion and the recent announcement that all of Harrah's properties have dropped their resort fees. The mere existence of ancillary fees will help the complimentary Radisson initiatives resonate with travelers.
Radisson has also introduced some pay-as-you-go amenities that guests might appreciate, such as three-hour express laundry and a "super breakfast" option.
But what really grabbed my attention was a program called "Business Class." It strikes me as a hybrid of sorts: an ancillary fee for a bundled, rather than unbundled, product. For a fee of $30 to $45, an upgrade to Radisson's Business Class additionally gives you early check-in, upgrade to the best available room, breakfast (including a room service option), a daily newspaper, a drink credit and an additional 1,000 points per night in its Gold Points loyalty program. (For a limited time, guests can try the Business Class upgrade for $5 if they also simultaneously enroll in the Gold Points program.)
In Europe, Business Class also includes an espresso machine and assorted coffees, upgraded amenities, turndown service and pay-TV/movies (apparently, Radisson still has some transatlantic consistency issues to work through).
In Radisson's case, the creation of all this value for guests, like its upgraded Radisson Blu brand, is no doubt driven by the need to put focus on the "new" Radisson experience. This spring, Radisson announced plans to spend $1.5 billion to both upgrade the brand and put it in global alignment, and Kirschke told me that 100 days into the project, they've already spent $350 million.
The new products look good, and I'd like to think that the stage was set for a positive reaction to these initiatives by the near-universally despised ancillary fee trend, jokingly personified by charging a fee to pass a bottle of water to a fellow panelist.
With Business Class, Radisson may have picked up on something simple that other marketers might have lost sight of during the rush to unbundle: At the end of the day, people don't mind paying something extra when, in return, they actually get something extra.
Email Arnie Weissmann at [email protected] and follow him on Twitter.
This column appeared in the Aug. 16 issue of Travel Weekly.