August 14, 2002

Price of Grapefruit

Andrew Tobias wonders how a Beverly Hills hotel that charges him $18 for a grapefruit can afford to rent him a whole room for $84 a night. Silly Andrew. It's only because the margins on items like grapefruit are so large that the hotel can advertise that it only costs $84 a night.

Andrew Tobias is annoyed: it's unfair to charge him $18 for a grapefruit. He feels cheated, and when people feel that they are being cheated they get really, really upset--it seems to be hardwired into us.

The interesting thing is that even with this strong feature of human psychology--don't cheat us, or we'll get mad--to deal with, the hotel prefers to overcharge for incidentals so as to be able to advertise a low barebones room rate. Something's going on here in the hotel's decision-making processes that I don't understand.

I do know, however, that I am annoyed that I have to constantly tell the kids, "Don't you dare take anything from that minibar refrigerator!"


Andrew Tobias - Money and Other Subjects

I know room service has specific menus, but from time to time I remember that at many finer hotels you can ask for more or less anything.

“Would you happen to have a grapefruit in the refrigerator?” I asked.

It was past midnight, and I figured I’d be good for a change.  How wrong can you go with a whole grapefruit as a late night snack?

“You want a whole grapefruit?  Anything else?”

“Just a knife.  A whole grapefruit and a knife to cut it with.”

I am staying at a 4-star Beverly Hills hotel, with an amazing down comforter on the bed, a two-line line with modem, tasteful art on the walls, balcony with a view ($84 plus tax and the $5.95 Priceline fee) – so in less than half an hour there was a knock at my door.

A whole grapefruit.  A knife.  A salt shaker (huh?).  And a bill for $17.54.

I plan to ask about this when I check out in the morning.

“How can you afford to rent me a beautiful room like that for less than the cost of five grapefruits?” I will ask.

Posted by DeLong at August 14, 2002 10:09 AM | TrackBack

Comments

I always thought that outrageously-expensive hotel incidentals were aimed at business travellers with expense accounts. You're more likely to spend $18 on a grapefruit if it's not your money, after all.

Posted by: FMguru on August 14, 2002 11:09 AM

It helps to think of that little refrigerator in the hotel room as a tiny grocery store and the room as a giant loyality card wrapping in you what the marketing guys call a relationship.

Posted by: ben on August 14, 2002 05:57 PM

Surprisingly, I'm reasonably confident that Brad might be wrong. The hotel room was almost certainly cheap because demand was low for that evening and the hotel feared the bed would go unused. Possessing an item more perishable than the grapefruit, the hotel was willing to auction it off on Priceline.

Posted by: Jeff Hauser on August 14, 2002 08:14 PM

Wonder why Tobias was not sensible enough to price the grapefruit and knife? Strange overlook.

Posted by: on August 15, 2002 09:31 AM

You should have brought five grapefruit to the

front desk and offered them as payment for

the room!

Posted by: John on August 19, 2002 11:55 AM
Post a comment