Honesty box hotels: You decide how much you pay

Five hotels in Paris now allow guests to pay only what they think their stay was worth. It seems fraught with financial risk, but the honesty policy has its benefit. Gillian Orr reports

Anyone who has ever bowed their head and scurried past the box marked “suggested donation” without reaching into their pocket on their way into a museum or art gallery – I’m certainly guilty – might well have their doubts about a new business enterprise in Paris.

This week, five hotels in the city’s 9th and 11th arrondissements launched a scheme in some of their rooms that allows guests to pay whatever they feel like at the end of their stay. No flat rates, no extra for a view of the Sacré-Coeur. Just however many euros visitors are happy to part with.

“It’s a fair-price operation, one of confidence in the client,” says Aldric Duval, the head of the Tour d’Auvergne hotel, one of the participating venues, and the man who came up with the idea.

One might accuse Duval of naïveté. After all, this is a world in which WH Smith had to uninstall honesty boxes for its newspapers earlier this year after staff found that customers could not be trusted to give the right change, preferring instead to “pay” with chewing gum and foreign coins. And that was only for items costing a quid or two. Honesty boxes may thrive at churches and local farms, but can they succeed in big business? And how would a hotel fare with a similar strategy?

“Actually, people have an altruistic motive and will pay a positive amount because they feel that they should pay the seller and they care about them,” says Vincent Mak, a lecturer in marketing at the University of Cambridge and a co-author of the study “Pay What You Want” as a Profitable Pricing Strategy.

“But I have the suspicion that these hotels will suffer losses. People will pay something, but these hotels will not be able to earn as much as if they had simply charged a going rate for the market.”

Indeed, Duval tells me that his very first customer paid €140 (£111) for a night. The average cost of a room in the area, he says, is between €150 (£118) and €200 (£158). He sounds pleased but I can’t help but wonder why he doesn’t just charge the full whack.

Hotel Tour d’Auvergne in Paris launches pay-what-you-want Hotel Tour d’Auvergne in Paris launches pay-what-you-want

But such offers have other rewards. Specifically, had anyone even heard of the Tour d’Auvergne before it offered this unusual deal? It is a tactic that has worked for restaurants around the world. “If this campaign is carried out with sufficient momentum, creates a lot of press and activity on social media so that people find out about it, and indeed motivate each other to actually pay well, then it could succeed,” observes Professor Mak.

The added publicity that surrounded Radiohead’s move to ask fans to pay what they felt like for their 2007 album, In Rainbows, saw downloads soar. And 38 per cent of customers actually coughed up, which was enough for one member of the band to assure the public that, in digital terms, it was their most successful record yet.

Meanwhile, at the Edinburgh Festival this year, the comedian Lewis Schaffer will give audience members the option to pre-purchase tickets for £5, or to give what they feel at the end of the show.

“I don’t make much money at the Edinburgh Festival doing pay-what-you-want shows. I do it that way so I can guarantee that more people see me,” says Schaffer. “But I’m using the same business model as last year. And that didn’t work. I don’t know why I’m doing it again.” It may explain why he has called his show Success Is Not an Option.

Interestingly, in Freakonomics, the most popular pop-economics book in history, a chap called Paul Feldman sets up a bagel business in an office based on the honour system. He discovers that people are more likely to pay better when the weather is nice. He also believes that higher-paid executives cheat more than workers lower on the corporate ladder.

By that logic, Duval’s hotel should at least do well over the summer. But he might be hoping that the more well-heeled tourists go elsewhere to lay their head when visiting the City of Light.

Have you tried new the Independent Digital Edition apps?
Travel
ebookHow to enjoy the perfect short break in 20 great cities
Independent Travel Videos
Independent Travel Videos
Simon Calder in Amsterdam
Independent Travel Videos
Simon Calder in Giverny
Independent Travel Videos
Simon Calder in St John's
Independent Travel Videos
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Travel

    Guru Careers: Dining Room Head Chef

    £32K: Guru Careers: We are seeking a Dining Room Head Chef to work for one of ...

    Guru Careers: Pastry Sous Chef / Experienced Pastry Chef

    £27K: Guru Careers: We are seeking a Pastry Sous Chef / Experienced Pastry Che...

    Ashdown Group: Technical IT Manager - North London - Growing business

    £40000 - £50000 per annum: Ashdown Group: A growing business that has been ope...

    Recruitment Genius: Technical Supervisor

    £24800 - £29000 per annum: Recruitment Genius: As one of London's leading Muse...

    Day In a Page

    General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

    Miliband's unlikely journey from hapless geek to heart-throb

    He was meant to be Labour's biggest handicap - but has become almost an asset
    General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

    On the margins

    From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
    Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

    'This is the battle of young Egypt for the future of our country'

    Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
    Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

    Why patients must rely less on doctors

    Improving our own health is the 'blockbuster drug of the century'
    Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

    Flesh in Venice

    Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
    11 best anti-ageing day creams

    11 best anti-ageing day creams

    Slow down the ageing process with one of these high-performance, hardworking anti-agers
    Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

    Juventus vs Real Madrid

    Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
    Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

    Ashes series looks a lost cause for England...

    Whoever takes over as ECB director of cricket, says Stephen Brenkley
    Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

    Fishing is on Nigel Farage's mind

    Ukip leader casts a line to the disaffected
    Who is bombing whom in the Middle East? It's amazing they don't all hit each other

    Who is bombing whom in the Middle East?

    Robert Fisk untangles the countries and factions
    China's influence on fashion: At the top of the game both creatively and commercially

    China's influence on fashion

    At the top of the game both creatively and commercially
    Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

    The man known as GOD has a reputation for getting the job done

    Lord O'Donnell's three principles of rule
    Rainbow shades: It's all bright on the night

    Rainbow shades

    It's all bright on the night
    'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

    Bread from heaven

    Dutch survivors thank RAF for World War II drop that saved millions
    Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

    How 'the Axe' helped Labour

    UK will be 'run for the wealthy and powerful' if Tories retain power