Comments on: Free Entrance, Free Coffee, Free WiFi…Free Rooms?

By: Free stuff available for free right here where it’s free : Tips from the T-List

Fri, 21 Mar 2008 00:56:33 +0000

[...] Interesting post on the Highland Business Research blog, dissecting the latest muse from Chris Anderson (for it is he, man of the Long Tail fame). [...]

By: Stephen

Stephen — Wed, 12 Mar 2008 21:21:21 +0000

Dan – having stayed in Etap rooms myself, I can see that they would probably be the kind of places where you could get away with having an advert on the walls of the room – I think that at a certain level of the market, you might just accept that as part of the ‘cost’ of a cheap room.

Martin – thanks for the info on Vegas. I thought that this must be happening somewhere but couldn’t put my finger on exactly where. Also an excellent suggestion about cruises!

By: Martin

Martin — Wed, 12 Mar 2008 21:06:40 +0000

I think some hotels in Las Vegas offer ‘free rooms’ as as incentive to get punters in. In this case, the ancillary revenue – the guest’s losses – will more than cover the revenue lost from the room rate.

One sector where Anderson’s latest theory might work is cruise. A free cabin, but you pay for drinks, food, facilities. No popping out to the local supermarket if you’ve 300km from shore.

Or how about a mash-up – gambling-led cruises?

By: Dan G.

Dan G. — Wed, 12 Mar 2008 09:36:57 +0000

I stayed in an etap in Munich which was perfectly functional but not necessarily “pleasant” at 50 euros a night (about 30 pounds). Accor could, I reckon, offset a bit more of the price with a big advert on the wall. The room wasn’t exactly luxurious anyway so an advert would hardly offend. According to Andersonomics the lower price would drive demand, eyeballs and therefore the ad rate. With a hotel room too, you often have captured attention. A free wi-fi access would give you the mechanism to track the effectiveness of the ad by click-through.

By: soutschek.com - dive into the map » Blog Archive » Free geodata for marketing the long tail of tourism

Tue, 11 Mar 2008 21:57:33 +0000

[...] I came across an article called Free Entrance, Free Coffee, Free WiFi…Free Rooms, which was posted on the Tracking Tourism Blog. Steven, the author, picked up on Chris [...]

By: Reinhard

Reinhard — Tue, 11 Mar 2008 19:27:37 +0000

If the companies don´t earn any money, there will not be a future for the company, “Free!” might be a a marketing slogan but not much more. An example which we sold successfully in our destination about 15 years ago, was a mountainbike-bike product called “Get your mountainbike an a free holiday on top”. We (a touriste office) got a price reduction from the KTM Bicycles Manufacture and instead of selling the bikes cheaper, the customers got free holiday vouchers. The benefit: Clients pay the same price as in any bike-shop but buying with us they got a free holiday between 3 to 7 days (depending on the hotel category) At that time we called it co-operation, today we call it crossmarketing or: “0.00 is the Future of Business????”

By: Stephen

Stephen — Tue, 11 Mar 2008 16:35:31 +0000

Kevin, I think the key is to have range of services within the offering that enables the right degree of cross subsidy to occur. I’m not sure that a niche accommodation provider could do this but I can imagine that a niche tour provider might – assuming that their package involved rooms, meals, guides etc.

Actually, that’s made me think that the another example of the ‘three way’ model might be in the arrangements similar to those found in coach tours where the coach drops 30 willing spenders at a ‘honeypot’ and the driver and guide get their backhander from the honeypot for delivering them.

By: Kevin May

Kevin May — Tue, 11 Mar 2008 16:20:21 +0000

Now it strikes me, without going into too much scrutiny of Anderson’s early synopsis, that perhaps this doesn’t quite fit the Long Tail?

Well, it certainly throws up some questions with regards to Long Tail of Travel and “Free”.

Could niche operators, for example, with little or slim volumes being able to offset by going free?

Hummmm.

By: Stephen

Stephen — Tue, 11 Mar 2008 16:12:17 +0000

Reinhard/Vicky – again both good points.

I think the thing that’s coming through again is that this would be tough for a small independent operator to do – they tend not to have directly employed instructors/guides etc and so it needs that ability to offer a more diverse portfolio of services (beyond lodging) or sheer volume to achieve it.

I’m not sure about resorts although I always assumed that, beyond the different costs of living in various counties, that some all-inclusive resorts ‘loss led’ on lodging and made the money on incidentals. Can anyone confirm this?

By: Vicky

Vicky — Tue, 11 Mar 2008 14:00:18 +0000

That’s an interesting example Reinhard, because presumably there is exactly that element of captive market in your scenario.

I assume it is the case that once people are in residence at a ski resport, they don’t tend to wander off that much? And presumably the ski lessons etc are of higher value than off season accommodation?

I’m not sure if it the direct opposite or exactly the same principle as the all inclusive resorts, where food & drink is free and presumably revenue is on the accommodation and extras like sports and trips.

Stephen – your post has made my head spin!