Deceiving pricing practice in hospitality in the US

I am not a fan of the tipping culture here in the US as I wrote about it before. I find the pricing practice in the hospitality in the US equally annoying.

I was trying to book a place in Chicago for an upcoming trip. Here is how a room’s price looks on AirBnb:

The initial listed price you see is just 66% of the final price you pay. All the fees make up 33% of the final bill. Wonder what it’s like on OTAs such as Booking.com?

After everything is added, the final price is 25% higher than the advertised price. Resort fees are basically what hotels charge you for the use of amenities and facilities on top of the base room. Think of it this way, instead of pricing everything (base room + facilities) together, hotels break them out in order to charge more. It’s worth noting that not every hotel charges resort fees.

I am not saying that the properties have to eat up the taxes themselves. Nonetheless, I would feel more comfortable if they could just advertise the final prices, including everything. The prices will be higher, but so will be the competitors. So relatively speaking, there won’t be any loss of pricing appeal, but the consumers such as myself won’t feel deceived.

Weekly readings – 11th May 2019

Charlie Munger, Unplugged. I try to read as much as possible about Charlie Munger. This is a great interview with him. The part I like most about the interview is when Charlie talked about how he read till he slept.

In News Industry, a Stark Divide Between Haves and Have-Nots. An insightful and fascinating piece on the struggle of newspapers as a whole to generate digital revenue to offset the loss in ads dollars. Only a few exceptions and the Big Three (WSJ, The Times and The Post) seem to have managed reasonably well.

Uber Wants to Be the Uber of Everything—But Can It Make a Profit? The “we are going to be the Amazon of transportation” narrative will be used a lot ahead of Uber’s IPO. I can see some value in that, but frankly, I don’t believe that is the case at the moment. The level of competition that Amazon had to face back in the day and Uber has to face now is likely different. I doubt Amazon faced a lot of legal challenges as Uber has had up to now. Plus, the economics of the two companies aren’t the same. Look at the chart below and see if there is any similarity between the two

Eating breakfast is not a good weight loss strategy, scientists confirm.

Can Bird build a better scooter before it runs out of cash? A revealing piece on the scooter business.

Ilargi: Renewables Are Dead. I find renewables polarizing as a subject. There are fans on each side of the argument. No matter what, I guess if we hadn’t tried, we wouldn’t have known what we know now.

New Data: The Airbnb Advantage. According to AirBnb, New York, London and Paris make up less than 3% of its total listings and no city makes up more than 1% of the listings.

Ethiopia’s garment workers make clothes for Gap, H&M and Levi’s but are the world’s lowest paid. Workers in sweat shops in Ethiopia got paid $26/month. The same figure in Vietnam is $180/month.

India’s water crisis is already here. Climate change will compound it.

Weekly readings 4th May 2019

The Airbnb Invasion of Barcelona. A look at how tourism-related problems got out of hand at one of the hottest destinations in the world, Barcelona.

Netflix Fights to Keep Its Most Watched Shows: ‘Friends’ and ‘The Office’. It’s amazing that “Friends” and “The Office” make up of 5% of the total watching minutes on Netflix and yet the streaming service doesn’t own the rights to those IPs.

The bitter truth behind the Nutella economy. If you care about the ethical aspect of business, you may want to read about this. I understand that there are a lot of products or services that we use everyday come from organizations with a record of questionable ethical practices. However, given that Nutella is pretty popular around the world and in America, you may want to know a bit more about it. And it’s not good for your health!

IHG Sees Room for Improvement in Hotel Revenue Management. The article discusses mainly the attribute-based booking trend in the hospitality industry. Attribute-based booking refers to the model that allows guests to choose from a room level such as number of beds, view and room type to amenities inside the room. Everything is a la carte. It can create the maximum personalization and excitement for guests, but it will require a totally different operations from inventory, marketing to housekeeping and revenue management.

The Most Valuable Company (for Now) Is Having a Nadellaissance. A great coverage on how Nadella revived Microsoft. I really like his no-nonsense style that was shown when he refused to celebrate the $1 trillion valuation.

The fight for the bundle is the war for the future of TV. A nice piece on the state of TV

The making of Amazon Prime, the internet’s most successful and devastating membership program. I found it interesting to read stories on how Prime came into beings. The stories show how great Bezos’ business acumen is

Weekly readings – 30th March 2019

What even is AirBnb anymore? Questions that AirBnb will face ahead of its IPO and after.

2018 Theme Report. An informative study on the theatrical and home entertainment market environment in 2018.

How Kirkland Signature powers Costco’s success. A nice coverage on the signature private label of Costco.

2019 State of the Cloud. A framework to look at cloud businesses by folks at Bessemer Venture Partners.

The 2019 Drunk Shopping Census. An interesting piece on drunk folks’ purchase behavior. It must be tough for one to recall back the purchases made when drunk when one participates in the survey. The folks at The Hustle are good with words and sometimes have pretty good content. Give them a follow if you want daily email with overview of what happens in business and tech.

AirPods. I totally agree with the author of this post. AirPods are truly a massive success. Since I bought them last May, I have used them at least 6-7 hours a day every day. Sometimes, I don’t even feel that they are in my ears. Convenience goes up significantly. The sound may be not as good as power users of wireless headphones would want, but it is good enough for average users like myself. The design is just right. You can exercise without worrying about losing them. (Follow Horace Deliu if you are a fan of micro-mobility and Apple)

The State of Online Travel Agencies – 2019. A good overview of Online Travel Agencies’ performance last year.

How Spotify & Discover Weekly Earns Me $400 / Month. A specific and personal example of how Spotify helps obscure artists get paid for their work. This is why I love Spotify.

Weekly Readings – 23rd March 2019

Chi Dung’s R collection. This guy’s work is impressive. If you are interested in R, take a look.

The Big Brexit Short. I really like this kind of investigative videos by Bloomberg. I honestly don’t follow Brexit enough. Hence, it’s good to know about this potential scheme. I highly recommend you check out Bloomberg’s Youtube channel. Treasure trove of good information.

What the hell is going on. A very long, yet informative study on how the switch from information scarcity to information abundance affects business, education and politics.

On the Hunt for Japan’s Elaborate, Colorful Manhole Covers. An interesting story on a beautiful aspect of Japan’s culture.

How India conquered YouTube. I find the article fascinating and informative. A good overview of Youtube’s popularity in India and the media consumption behavior in the country.

Howard Marks’ memos. His excellent and insightful memos are praised and read by Warren Buffets and many investors.

I found two links here and here that are very helpful in understanding the subscription model.

Nine Reasons Why Disney+ Will Succeed (And Why Four Criticisms are Overhyped). A fair and detailed piece on Disney+, Disney’s upcoming streaming service. I cannot wait to try the service myself

Inside AirBnb’s “Guerrilla War” against Local Governments. A very good article on how AirBnb fought local governments in the US to avoid taxes and restrictions that the local lawmakers sought to put on them. I am a believer in the fact that if the law allows you to avoid taxes, you have every right to not pay taxes and stay competitive. However, fighting hard to stop new laws (laws always play catch-up with the business world) intended to make AirBnb pay taxes is a bit too far. Loss of taxes strips a local government of necessary revenue to fund projects that will benefit citizens. If your business earns millions of dollars in revenue and profit, what’s the reason for not paying taxes? Simply by “being a platform”?

Pinterest S-1. The photo bookmarking company filed to go public.