For years now the lodging industry has been trying to catch-up with the global commercial airlines; It started back in the days when airlines offered 3 classes on the same aircrafts and it took some time but in the late 70’s/early 80’s of the 20 Century, the lodging industry came up with the idea of creating a 'hotel within a hotel'.

Big global brands �" Hilton and Sheraton came up with the idea of special “Executive floors”. Hilton called it “Vista floors”. Sheraton called it “Towers floors”.

Next came the idea of Yield management. Airlines understood the importance of controlling their seat availability and optimizing their seat sales. An empty seat is a pure loss of potential revenue. Profit maximization.

So, airlines began introducing sometimes up to 20 and even 30 price categories on the same flight.
Again, it took time, but global hotel companies adopted the “Yield management systems” and today even small non-branded privately managed hotels have their own “Yield Management system” and a person in the reservation or front office department who is in charge of the day-to-day operation of the system.

In the last 10-15 years, we are witnessing the huge growth of the Budget airlines, Low Cost and Ultra Low Cost airlines.

Again, hoteliers took their sweet time to react but over the last 10 years we see more and more new hotel brands adopting the “budget airlines” philosophy. Offering smaller guestrooms, reduced public areas spaces, minimal F&B at an affordable price.

This brings me to the newest marketing revolution presented by the large “Legacy airlines” as a response to the loss of market share to the Low-Cost Carriers. The name of this revolution is:

“BASIC ECONOMY”

During the last 12 months, we are witnessing more and more Legacy carriers coming up with a new price and service category onboard their aircrafts. These airlines have recognized that the old days are gone.

No more 3 classes on a 300 seats aircraft. First Class, Business Class and Economy class. Nowadays, in some airlines one can choose between First class, Business Class, Economy Premium and Economy class.

So, you probably ask yourselves, “What’s the big-deal”? Well, the legacy carriers recognized that they can try and compete with the budget airlines at their own game. Stripping away most if not all services that a legacy carrier gave away for free and sell just the seats.

As in many marketing revolutions before, US based airlines are taking the lead on this one as well.
Delta, United and American Airline start offering this new category of fares that are designed to be competitive with the cheap tickets offered by ultra-low fare carriers Spirit, Allegiant and Frontier.

The airlines are not adding a new cabin or section inside the aircraft.

The Basic Economy seats will be in the standard economy cabin �" likely middle seats towards the back �" but won’t be marked or otherwise noticeably identifiable.

You may ask yourselves, “So what is the relevancy to the lodging industry, How can we make such an idea work in hotels?”

The hotel inventory is very much like a commercial airliner. Each room is similar to an aircraft seat. A room not sold is dead-stock. My idea is to create a new price category in hotels. Call it “Basic Economy” or in a fancier marketing term that may fit the lodging sector better �" “Super-Value rooms”.
These rooms will offer the basics - no more, no less.

A comfortable room and that’s basically it. No room service, no Minibar, no free internet connectivity, no change of linen and bathroom towels every day (only every 3 days), no change or refreshment of the toiletries in the bathroom, no turndown service, no usage of concierge services, no free parking, no loyalty points, no upgrades to loyalty club members; Super-Value rooms will be sold only on the hotel’s own web-site or App in order to reduce distribution costs.

We need to focus only on the basics. The guest enjoys the same location, same brand, same security level, but will need to buy all the above services separately.

For many of you, hospitality and lodging executives, friends and colleagues, these ideas may sound absurd or even heretical and against the fundamental beliefs that you believe in that we are selling to our guests “Brands, service and experience”.

Clearly, there are many issues to look at. One issue that comes to mind is hotel classifications, but we - as hoteliers - need to adapt and find solutions that will allow us to compete in the ever-changing competitive world. The legacy carriers have their competition with the Low Cost and Ultra Low Cost carriers.

The lodging industry needs to compete with the alternative accommodations sector /sharing economy.

Joseph - Yossi - Fischer the CEO of Vision Hospitality & Travel - international lodging & Travel Solutions

This is strictly an exclusive feature, reprints of this article in any shape or form without prior written approval from 4Hoteliers.com is not permitted.