Hotel Behavioral Economics

November 20th, 2012

Of late, I’ve spent way too much time in hotels (I think 17 nights this semester).

However, these hotel rooms are perfect labs for managers to experiment with behavioral economics. You have a captive audience who is in a new environment for a short time, and is doing things differently than it would at home.

One of the key avenues for experimenting with nudges is with respect to house keeping. If a guest is staying in a hotel room for more than one night, there is no real reason why the room needs to be cleaned daily (unless he or she makes a big mess). Also, cleaning a room daily, when it is unnecessary is quite expensive.

So, many hotel rooms experiment with different ways of nudging people to not requesting daily upkeep.

A lot of messages deal with the environment–recycle your towels and save water. Sure, it’s great for the environment but I’m pretty sure what is motivating hotels is cost.

Starwood hotels (Westin, Sheraton, etc.) offer guests 500 Starwood points or $5 at the hotel cafe for each day they decline housekeeping. That is an Opt-Out approach. By default, they will clean your room and make your bed. Nudge.

The Omni takes an Opt-In approach. If you want your bed made, you have to affirmatively place this card on your bed. If you fail to do this, and do not opt in, they will not make your bed. Nudge.

The Hotel Palomar (a Kimpton Hotel) does not include telephone books or a bible in the room. There was a sign that said something to the effect of “We have a host of spiritual, religious, and other materials available at the front desk available upon request.” The Gideons be damned.

Relatedly, I recently stayed at a hotel in Berkeley, California. In order to turn on the lights and the heat, I had to insert my key card into this slot inside the room. Apparently this is common in Europe. I was really confused when I couldn’t turn the lights on. Also, the bar of soap was in the shape of a donut. Why? Because no one ever uses the inside of a bar of soap and it gets wasted. The towels were also tiny in that hotel.