Charging consumers by the pound. Which way will they tip the scales?

Samona Air, the national carrier of the South-Pacific island nation, Samoa, managed to generate a fair amount of turbulence with its controversial move to charge overweight passengers. The airline's weight policy has been in existence essentially from its inception last year and requires passengers to declare "their personal weight
during booking, which is then charged per kilogram at a rate
dependent on flight length. Customers will also be weighed at the
check-in counter."

Anyone who has flown in a (really) small plane knows that weight calculations are critical to a safe flight. While less intrusive in regular commercial owing to the range permitted in larger airliners, it nevertheless is a factor both in cost and safety and as the Samoan Air chief pointed out "aeroplanes always run on
weight, irrespective of seats."  Samoan's move to price by weight was likely fueled by two factors: a recent report by a Norwegian economist who suggested price by weight as the right economic model and the fact that many South Pacific islanders tend to be on the heavier than those in other parts of the world.

The airline's price discrimination strategy set in economic terms has somewhat predictably attracted protests from those viewing it literal terms. The Wall Street Journal has a report about some consumers threatening to boycott the airline while a couple actually mentioned the potential health benefits from fitting one's budget to one's size. As an aside apropos the latter, EveryMove, a start-up has an app that incentivizes people to stay healthy via rewards that include jewelry at blue nile, hunting gear at Cabela's and hotel stays at Hotel Monaco.

Initial consumer resistance notwithstanding, Samoan's move is reflective of the trend towards disaggregated pricing that has caught on in the hotel and airline industry. Aside from oft-quoted example of Ryan Air carriers like the Philippines' Cebu Pacific Air have been charging for "amenities" for some time.   Airfarewatchdog.com has a chart of airlines and their policies towards "passengers of size" with some like Southwest having a policy in place for the past several years.

Hotels have, thus far, been largely absent in the debate on weight as any move in that direction is likely to invite a stronger backlash as there is less of a basis in it from a security standpoint for hotels. One of the few and arguably brave (foolish?) establishments to try it out a few years ago was the Bioferienhotel
Mandler’s Landhaus, a tiny lodge in
the Austrian Alps which weighed guests on arrival. Leaner patrons were charged
less than their heavier counterparts. The organic-food oriented hotel suggests that these measures stimulate people to change their diet
and take up fitness training.

That there could also be some direct costs stemming from higher food cost or wear and tear on in-room FF&E as a consequence of guests of size is a matter that is unlikely to spur action in anytime soon even if the sub-text is one of promoting good health all around.

 

 

Published by

Vijay Dandapani

Co-founder and president of a New York based hotel company for 24 years. Grew the firm to five hotels in Manhattan and also developed a greenfield project at MacArthur airport, New York. Speaker at numerous prestigious forums including Economy Hotels World Asia, Lodging Conference, NYU, Columbia University Real Estate Roundtable, Baruch College's Zicklin School and ALIS. President and ceo of New York City Hotel Association since January 2017.

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