Shove Off, Bud – or That Will Be $30: Hotel Revenue Management Gone Bonkers?

By Robert McGarvey

The San Francisco Chronicle headline tells the story: “Lingering too long over breakfast? At one Nob Hill hotel, that’ll cost you $30.”

Phil Matier reports that “They say talk is cheap, but talking too long could cost you a bundle this week at San Francisco’s swank Fairmont Hotel, where lingering too long over breakfast will add an extra $30 an hour per person — plus tax — to the tab.”

Joe D’Alessandro, the head of San Francisco Travel, explained it away as “premium or congestive pricing.”  He added that airlines and hotels all do it.

Uh, well, no, they don’t.  What they do is “revenue management” where a room costs more in peak season and an airplane seat costs more in peak season.  But the lunch on the plane in coach does not cost more in peak season (and, please, let’s not give airline mandarins any ideas). And a mocktail at the hotel bar doesn’t cost more in peak, either.

The trigger for the Fairmont charge apparently is the J. P. Morgan Healthcare Conference at the Westin St. Francis, apparently one of the city’s biggest conventions. Attendance is estimated to be around 9000.

The only available room at the Fairmont for the night I checked – a Queen Queen Room – was priced at a breathtaking $1549.

The same room, a week later, was priced at $503.

Incidentally, breakfast at the Fairmont during the J P Morgan week involved a minimum $50 per person plus an 18% service charge and taxes.

And the $30 tab for overstaying is hit with an 8.5% city tax.

What do you want to scream about first?

But first: I know I have walked into a busy Peet’s Coffee on Market Street in San Francisco, ordered a coffee, and as I picked it up noticed every available seat was occupied – often with no sign of a coffee cup or food near the person who, frequently, was tapping away on a laptop. And I have wanted to scream, move along, bud, real customer wants the effin’ seat.

I have not screamed that. Yet. But I make no promises about the next time.

So I understand the restaurant desire to move customers along, to hustle them out the door to make room for new customers. Restaurants in fact have all manner of tools and tricks they use to move diners along and a surcharge isn’t usually one of them.

I also know that Uber surge pricing – where rates may double or triple or more over typical fares – has given all of us an object lesson in revenue management on the fly.  

So maybe it makes sense to wave a $30 penalty flag – and hope it doesn’t have to be actually collected from anyone.

And I have long advised anybody who asked to avoid some big meeting cities during peak conventions.  Here’s a list of some of the biggest. Prices just are surreal during many of them and often restaurants, even taxis and ride shares are stressed by the volume.

Sure, the people who live and work in San Francisco have to be there, even during the big conventions. They have my sympathy.

But back to the Fairmont and its $30 fee for overstaying breakfast.

You know what, the Fairmont allots 90 minutes for the meal – that’s without a surcharge – and I cannot remember the last time I spent that long at breakfast. Not even ones that are more about a meeting than eating.  

Count me as okay with the $30 fee, tho I suppose I wish we all just knew when we had occupied a table long enough and moved on voluntarily.  Maybe that is no longer possible.

I am more irked by the tripling of the room rate.

The $30 dawdler fee is avoidable.  The extra $1000 for the room isn’t if you want to stay at the Fairmont the week of the conference.

The solution? Stay elsewhere.

Was me I’d stay at the Claremont in Berkeley –  $437 per night during that J. P. Morgan shindig across the bay and, by the way, it’s also a Fairmont.

Problem solved.