Hotels Clean Up On Soap, Shampoo Freebies

In an era when swiping the bathrobe from your hotel room is frowned upon — not to mention charged to your credit card — one of the perks of staying at a luxury hotel is loading up your suitcase with free shampoos, soaps and other amenities.

But actually, of course, they aren't free. What most hotel guests don't realize is how much those chic bath products can add to the cost of a hotel room — as much as $50, depending on the products being used.

While most guests do not choose hotels on the basis of their bath products, the products do add to the cachet of a hotel. But they are also hidden costs, much like flowers on a restaurant bill.

As more and more luxury hotels are faced with an increasingly competitive market, they need to identify ways that give them an edge over their rivals. Name-brand soaps are one such way. The problem is that name brands cost more.

"Carrying Hermès products is a selling point, and it puts us in a different category of hotel," says Jeff Klein, owner of the Manhattan hotel the City Club, and heir to pest-control company Assured Environments. "It sends a strong message about who we are. When people hear we have Hermès, they think, 'Oh, if they have Hermès, they must be good.'"

A Form of Targeted Advertising

Such thinking is clearly good news for the cosmetic companies that are deemed chic enough to find their way into $3,000 hotel suites.

For companies like Kiehl's, Crabtree & Evelyn or Aveda, their presence in a top hotel is a form of targeted advertising or direct sampling that is so valuable, they're willing to forfeit a profit — or if they do make a profit, it's a small one.

Crabtree & Evelyn, based in Woodstock, Conn., has been partnering with hotels for 15 years. "While we want to make money from this program, we do it primarily for branding reasons," says James McArdle, vice president of sales. "Sometimes a hotel stay is someone's first exposure to the product."

Spokeswoman Catie Briscoe put it more bluntly: "When we put our products on an airline or in a hotel, you have a captive audience. If they know the brand, they're happy to see a name they recognize."

The end result, of course, is that Crabtree & Evelyn hopes that these travelers will purchase their products.

Sorry, Motel 6

How successful is this strategy?

"We get calls every day from hotel guests who have tried the products and want to purchase them," says Mark O'Berski, vice president of consumer marketing at Minneapolis-based Aveda. A subsidiary of Estée Lauder, Aveda supplies the W Hotels — part of the Starwood Hotels & Resorts chain — as well as 150 others.

Estée Lauder doesn't break out separate sales figures but claims that Aveda is one of its most successful lines. "Sometimes [the hotel guests] will even walk into a store carrying the hotel shampoo bottle and say, 'I want this,'" O'Berski adds.

PricewaterhouseCoopers hotel analyst Bjorn Hanson is a bit skeptical of the cosmetics companies that moan about their low profits by selling to hotels.

"Selling products to a hotel is a distribution outlet that's done at a lower cost, because there are large volumes of purchases which are done in individual orders," he says. "It's a less expensive form of distribution, which allows the products to be sold at a lower price."

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