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The Rise and Fall of the Hotel Mini-Bar

mcphage 12y ago
The hotels are losing money, because people aren't willing to pay 200% markup on snacks. I wonder if people would actually use it if the markup wasn't such a slap in the face? They might not lose as much money on it if they didn't need to throw so much unpurchased merchandise out.
- noonespecial 12y ago
  I always suspected that if minibars had employed a universal markup of just 15-20% of the bulk price the hotel payed for the goods they would have been run-away successes and the kind of cash cows the hotels hoped they would be. Better still, any hotel that got over the fear and greed to emerge as "the hotel with the awesome, cheap minibars" would have cleaned up with extra stays as well.
  - RickS 12y ago
    If they had a dropdown for a few beer brands on the booking site, and rolled it into room price at a 30% margin, I'd totally go for it, and it'd be good as a cheeky marketing stunt too. Imagine it - which 6 pack would you like to be waiting in your room? Much more enticing.
    - mcphage 12y ago
      Oh man, that would be awesome.
    - noonespecial 12y ago
      That's actually a really fantastic idea. Maybe even enough to break the priceline/expedia market grip and bring people right to the chains website. Some marketer's boss is going to get a nice bonus for that "initiative".
- Silhouette 12y ago
  I think the article has it pretty spot on. The mark-up is invariably absurd, particularly in today's 24/7 culture where often you could just buy the same product at a normal price from a store within a short walk of the hotel. On top of that, the scary warnings and (clearly justified) fear of incorrect charges probably keep a lot of guests from even opening the fridge door. I don't even go near the area of the room where a mini-bar fridge is these days, and I actively consider mini-bars a negative factor when choosing where to stay. The "I obviously don't believe you but I can't be bothered to argue" look from the reception staff when you entirely fairly and correctly point out that you've been charged for something despite never even opening the fridge is just a little too much for me when I'm already spending a small fortune on staying somewhere "nice". I did notice that the last place I stayed, the fridge was actually locked by default, and (I'm told) you had to leave a special deposit with reception if you wanted to unlock it. I guess that takes care of the never-opened-the-fridge argument, at least. On the other hand, it did make a mockery of their "generous" gift of a free bottle of water on arrival, since that bottle was left in the fridge. Way to turn a tiny advantage into making a guest feel robbed within five minutes of arrival...
  - mcphage 12y ago
    > their "generous" gift of a free bottle of water on arrival Oh, right, their "here have this bottle of water isn't it so nice that will be $5"... something I hate even more than the minibar.
  - meric 12y ago
    One suggestion. Did you try call housekeeping and tell them to bring you more one litre bottles of water? It's free and I tend to order 3-5 a night (as many as my thirst called for). Make sure to call housekeeping and not room service.
- brc 12y ago
  I assume the markup is there to recover the costs of running hundreds of separate points of sale and storage and a convoluted payment process and slow and expensive restocking. Dropping the price probably leads to higher restocking costs for the same amount of revenue. I assume someone has done the numbers on this, hotel operators are not stupid. Perhaps drone-delivered items from a central menu (I'm thinking a roomba-like device) or having the automated system that released the stock using a mobile app might work - something with near-field communication like they are doing for door lock systems. Or more comprehensive vending machines on each floor. I suspect the issue is shrinkage through theft and expiring items that is the main problem, and that is difficult to work around and still provide in-room purchases.
  - pcurve 12y ago
    "Or more comprehensive vending machines on each floor." That's what most people are looking for, and it is the best solution.
- stevep98 12y ago
  It's not just the money. You also have the bad impression that this leaves in the minds of their guests, who feel like they're being ripped off. In my mind, it's similar to movie theaters charging upwards of $5 for a coke. I understand that movie theaters can charge what they want, but someone, somewhere has decided that the maximum profit is attained by these very high prices. But, look around the movie theater - relatively few people bought a coke. 90% of the audience are sitting thirsty for 2 hours. My suggestion is. Charge $2.25 for a coke. Publicize it, so that people know that you're the theater that doesn't rip people off. Being that theaters are always complaining that they make most of their money on concessions, you'd think that they'd want to differentiate themselves on the value they bring, rather than just fleecing their customers.
r00fus 12y ago
I wonder how the price of the items in the minibar affected the update. It's not clear if the prices of the items in the first mini-bars back in the 60's were 1300% inflated. If I were, for example, only paying 2-3x of the cost, perhaps the volume might justify the convenience. I'm surprised that a blog named pricenomics hasn't addressed this question.
brc 12y ago
In the hotel I stay at regularly, a fridge is present and running but has nothing in it. I usually go to a store and purchase a couple of things - maybe some beer and something simple for breakfast, like a couple of pieces of fruit or yoghurt. Having a fridge is more of a benefit as a guest than having said fridge stocked full of overpriced junk. In some of the hotels with automated charge systems I have still used the fridge just by sitting my stuff on top, and have never been charged. In fridges with manual mini-bar I often take all the overpriced beer out, put it in the cupboard, replace it with my own, then put it back in when I leave. This only works on overnight stays as they check the fridge each day, but works for me.
chrisbennet 12y ago
The last mini bar I "used" was on a cruise ship. I put my own water bottle in it but didn't take anything out. I got charged for "disturbing the mini bar" or something like that.
dhughes 12y ago
Convenience is the key do you really want to go to the grocery store and pay $1.69 the minibar at $3.00 or split the difference and try the vending machine for $2.25? A similar concept is in Vancouver, BC Canada where vending machines in condo lobbies http://www.cbc.ca/news/canada/british-columbia/groceries-from-vending-machines-coming-to-metro-vancouver-condos-soon-1.2884470 http://www.cbc.ca/news/canada/british-columbia/groceries-fro...
greggman 12y ago
Having grown up used to over priced mini-bars I was surprised when in Japan the majority of hotels I've stayed at have vending machines either on the same floor or usually on the first floor or basement where the price is exactly the same as anywhere else, zero markup whatsoever.
ianlee 12y ago
some hotels actually offer free minibar services now. They figure it's a nice addition to the customer experience as it differentiates themselves away from the competitors so much. I've experienced this in the Galaxy hotel, Macau
ianlee 12y ago
I feel like there's a lot of negativity with the way that hotels handle their mini bars. but not all are bad! During checkin while I was at the Galaxy hotel, Macau, the concierge informed me that all items in the minibar are free. They figure it's a nice addition to the customer experience as it differentiates themselves away from the competitors so much.
mikhailfranco 12y ago
Empty fridge is much more useful than a stocked mini-bar.
yitchelle 12y ago
Now if the items in the minibar is free, that would be a revolution. The hotel could just tell the guest that their fridge wont be restock during their stay, but their mini-bar consumption would be free.
- seanmcdirmid 12y ago
  The Sofitel in Bangkok does that.
  - mattlong 12y ago
    As does the NEXT Hotel in Brisbane. At first I didn't trust the sticker on the fridge saying something along the lines of "stuff inside is free". I called the front desk to confirm before partaking :)

The hotels are losing money, because people aren't willing to pay 200% markup on snacks. I wonder if people would actually use it if the markup wasn't such a slap in the face? They might not lose as much money on it if they didn't need to throw so much unpurchased merchandise out.

noonespecial 12y ago
I always suspected that if minibars had employed a universal markup of just 15-20% of the bulk price the hotel payed for the goods they would have been run-away successes and the kind of cash cows the hotels hoped they would be. Better still, any hotel that got over the fear and greed to emerge as "the hotel with the awesome, cheap minibars" would have cleaned up with extra stays as well.
- RickS 12y ago
  If they had a dropdown for a few beer brands on the booking site, and rolled it into room price at a 30% margin, I'd totally go for it, and it'd be good as a cheeky marketing stunt too. Imagine it - which 6 pack would you like to be waiting in your room? Much more enticing.
  - mcphage 12y ago
    Oh man, that would be awesome.
  - noonespecial 12y ago
    That's actually a really fantastic idea. Maybe even enough to break the priceline/expedia market grip and bring people right to the chains website. Some marketer's boss is going to get a nice bonus for that "initiative".
Silhouette 12y ago
I think the article has it pretty spot on. The mark-up is invariably absurd, particularly in today's 24/7 culture where often you could just buy the same product at a normal price from a store within a short walk of the hotel. On top of that, the scary warnings and (clearly justified) fear of incorrect charges probably keep a lot of guests from even opening the fridge door. I don't even go near the area of the room where a mini-bar fridge is these days, and I actively consider mini-bars a negative factor when choosing where to stay. The "I obviously don't believe you but I can't be bothered to argue" look from the reception staff when you entirely fairly and correctly point out that you've been charged for something despite never even opening the fridge is just a little too much for me when I'm already spending a small fortune on staying somewhere "nice". I did notice that the last place I stayed, the fridge was actually locked by default, and (I'm told) you had to leave a special deposit with reception if you wanted to unlock it. I guess that takes care of the never-opened-the-fridge argument, at least. On the other hand, it did make a mockery of their "generous" gift of a free bottle of water on arrival, since that bottle was left in the fridge. Way to turn a tiny advantage into making a guest feel robbed within five minutes of arrival...
- mcphage 12y ago
  > their "generous" gift of a free bottle of water on arrival Oh, right, their "here have this bottle of water isn't it so nice that will be $5"... something I hate even more than the minibar.
- meric 12y ago
  One suggestion. Did you try call housekeeping and tell them to bring you more one litre bottles of water? It's free and I tend to order 3-5 a night (as many as my thirst called for). Make sure to call housekeeping and not room service.
brc 12y ago
I assume the markup is there to recover the costs of running hundreds of separate points of sale and storage and a convoluted payment process and slow and expensive restocking. Dropping the price probably leads to higher restocking costs for the same amount of revenue. I assume someone has done the numbers on this, hotel operators are not stupid. Perhaps drone-delivered items from a central menu (I'm thinking a roomba-like device) or having the automated system that released the stock using a mobile app might work - something with near-field communication like they are doing for door lock systems. Or more comprehensive vending machines on each floor. I suspect the issue is shrinkage through theft and expiring items that is the main problem, and that is difficult to work around and still provide in-room purchases.
- pcurve 12y ago
  "Or more comprehensive vending machines on each floor." That's what most people are looking for, and it is the best solution.
stevep98 12y ago
It's not just the money. You also have the bad impression that this leaves in the minds of their guests, who feel like they're being ripped off. In my mind, it's similar to movie theaters charging upwards of $5 for a coke. I understand that movie theaters can charge what they want, but someone, somewhere has decided that the maximum profit is attained by these very high prices. But, look around the movie theater - relatively few people bought a coke. 90% of the audience are sitting thirsty for 2 hours. My suggestion is. Charge $2.25 for a coke. Publicize it, so that people know that you're the theater that doesn't rip people off. Being that theaters are always complaining that they make most of their money on concessions, you'd think that they'd want to differentiate themselves on the value they bring, rather than just fleecing their customers.

r00fus 12y ago

I wonder how the price of the items in the minibar affected the update. It's not clear if the prices of the items in the first mini-bars back in the 60's were 1300% inflated. If I were, for example, only paying 2-3x of the cost, perhaps the volume might justify the convenience. I'm surprised that a blog named pricenomics hasn't addressed this question.

brc 12y ago

In the hotel I stay at regularly, a fridge is present and running but has nothing in it. I usually go to a store and purchase a couple of things - maybe some beer and something simple for breakfast, like a couple of pieces of fruit or yoghurt. Having a fridge is more of a benefit as a guest than having said fridge stocked full of overpriced junk. In some of the hotels with automated charge systems I have still used the fridge just by sitting my stuff on top, and have never been charged. In fridges with manual mini-bar I often take all the overpriced beer out, put it in the cupboard, replace it with my own, then put it back in when I leave. This only works on overnight stays as they check the fridge each day, but works for me.

chrisbennet 12y ago

The last mini bar I "used" was on a cruise ship. I put my own water bottle in it but didn't take anything out. I got charged for "disturbing the mini bar" or something like that.

dhughes 12y ago

Convenience is the key do you really want to go to the grocery store and pay $1.69 the minibar at $3.00 or split the difference and try the vending machine for $2.25? A similar concept is in Vancouver, BC Canada where vending machines in condo lobbies http://www.cbc.ca/news/canada/british-columbia/groceries-from-vending-machines-coming-to-metro-vancouver-condos-soon-1.2884470 http://www.cbc.ca/news/canada/british-columbia/groceries-fro...

greggman 12y ago

Having grown up used to over priced mini-bars I was surprised when in Japan the majority of hotels I've stayed at have vending machines either on the same floor or usually on the first floor or basement where the price is exactly the same as anywhere else, zero markup whatsoever.

ianlee 12y ago

some hotels actually offer free minibar services now. They figure it's a nice addition to the customer experience as it differentiates themselves away from the competitors so much. I've experienced this in the Galaxy hotel, Macau

ianlee 12y ago

I feel like there's a lot of negativity with the way that hotels handle their mini bars. but not all are bad! During checkin while I was at the Galaxy hotel, Macau, the concierge informed me that all items in the minibar are free. They figure it's a nice addition to the customer experience as it differentiates themselves away from the competitors so much.

mikhailfranco 12y ago

Empty fridge is much more useful than a stocked mini-bar.

yitchelle 12y ago

Now if the items in the minibar is free, that would be a revolution. The hotel could just tell the guest that their fridge wont be restock during their stay, but their mini-bar consumption would be free.

seanmcdirmid 12y ago
The Sofitel in Bangkok does that.
- mattlong 12y ago
  As does the NEXT Hotel in Brisbane. At first I didn't trust the sticker on the fridge saying something along the lines of "stuff inside is free". I called the front desk to confirm before partaking :)