Years ago, a friend of ours was planning a trip to Walt Disney World with his girlfriend. They planned to stay on property, at one of the hotels owned by WDW. Our friend didn’t want to look like a cheapskate, so he had suggested the two of them stay at Caribbean Beach Resort, which was considered one of Disney’s “moderately” priced resorts.
His girlfriend thought that would be a nice idea, but if they paid just $20 more per night, they could stay at one of the cheaper view rooms at Disney’s Port Orleans Resort. He agreed, and made a reservation for Port Orleans (for you purists out there, this was before Disney changed the name of their “Dixie Landings” resort hotel. Back then, it was Port Orleans and Dixie Landings, not Port Orleans – French Quarter or Riverside).
A few weeks later, the girl said something to the effect of, “You know, for just $50 more per night, we could could get a really awesome view at the same hotel, AND we wouldn’t have to walk so far to the bus to get to the parks every day.” And the reservation was changed.
Not long after that, the girlfriend suggested they “move up” to one of the deluxe hotels, “…because the room would be so much bigger,” and it would only cost X more per night than what they were spending now.
So by the time they finally went on that vacation, our friend was spending more than double per night than he originally planned to spend on his hotel room.
Disney, of course, has been collecting and studying their customers’ buying habits, to the nth degree, for decades. They know they can offer a room with a better view, a better location, a bigger space, etc., and people who want more (because they can afford it, because it’s a once-in-a-lifetime experience, because they’ve been taught to “make magical memories” etc.) will pay it.
Hotels do the same thing. An “upgrade” at a Hilton branded hotel may include being on a higher floor with a better view, a patio, a bigger room, or maybe even a suite. If you have Marriott Bonvoy points or Hyatt status, you may get those automatically. But if you’re a typical person who doesn’t collect points and miles, those upgrades will cost you cold, hard cash.
Airlines caught on to some of that pretty early – by 1955, the concept of “first class” was introduced by TWA. Those seats were nicer and the food was better. However the “poor shlubs” in “coach” still had it OK; the seats on United Airlines were big enough, plushy, and you still got a halfway decent meal on American Airlines.
But then, over the years, coach class, which eventually turned into varying degrees of “economy” class, continued to be downgraded. Meals disappeared and were replaced by snacks. The seats in economy (and eventually “Basic Economy” – thanks for starting that concept, Delta Air Lines. NOT.) got smaller.
Meanwhile, snacks cost less than meals, which made the airlines more money. And smaller seats meant they could pack more seats into the plane…which also made the airlines more money.
On the other end of the spectrum, business class was added to first class. Both classes became more and more swanky, with lie flat seats, and pods, and bigger IFE units, and food & beverage options such as Singapore Airlines’ lobster and Air France’s Piper Heidsieck.
Of course, the people who fly first or business class are a special breed of people. They either have the points, have the money, or work for a company that has the money to pay for flights like that. Most flyers are still back in economy.
However airlines eventually realized what hotels (and Disney) knew for years – they could upsell to those economy class passengers, to make them pay more! But how? Well, think about it…
- People who are sitting towards the rear of the plane have to wait forever to get off. Want to be among the first off the plane? Pay for a seat closer to the front.
- Most folks would rather sit next to their travel partners if they can. Want to be guaranteed to sit with your spouse, significant other, friend, etc.? Pay to reserve your seat.
- Those economy seats are tiny. You’re really squashed in there. And if you’re particularly tall or wide, it’s even worse. But premium economy seats are bigger – you can pay to upgrade to one of those.
- Exit seats were always the most valuable because they gave more space between you and the seat in front of you – that was great for people with longer legs. So now airlines charge even more for those seats.
- And, of course, if you have the right credit card, you can load onto the plane faster, regardless of where your seat is, so you can be guaranteed that there will be enough room for your carry on and you won’t have to gate check it.
Yep, airlines have realized that if they make their passengers miserable enough – sitting in the back, without their travel partners, in a seat that’s too small for their body, with the possibility of having to gate check their bag – they might be willing to pay more to avoid that situation. The New Yorker coined the phrase “calculated misery” in 2014 to describe the phenomenon.
It’s just like our friend’s girlfriend, all those years ago. For just $30 more (per person), you can sit in a more comfortable seat, next to your person(s) of choice, AND get off the plane faster. And you know how high those credit card fees are.
The concept is working well, and the airlines are making a fortune off of that mindset. They make more money by making us miserable.
H/T: Vox, The New Yorker
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