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Monday, July 8, 2013

Why Hotels Don't Provide Toothpaste

And the answer is not cost. Daniel Engberg from Slate writes:
I asked this question of executives at 18 North American hotel chains, and most provided the same pair of explanations. First, they said their in-room amenities are chosen based on extensive consumer research. In other words, if the hotels aren’t giving you toothpaste, it’s because you don’t really want toothpaste. ... (Update, July 3: There is at least one major exception to the rule. A Hyatt spokesperson reports that all of that company's hotels in North America offer in-room tubes of Aquafresh toothpaste.) 
The second explanation took the form of an appeal to hospitality norms. Several sources said that their company takes its cues from rivals. “Many of our competitors do not include toothpaste as a standard amenity,” pleaded brand director Debbie Grant of InterContinental Hotels & Resorts. Others shrugged and pointed to the independent companies that assign standard ratings for quality of service. If the ratings don’t require it, the hotels won’t acquire it. 
Sure enough, the hotel-ratings firms make very precise toiletry demands, yet as a rule omit any reference to dental care products. ... 
“The diamond ratings come from what we typically see,” a AAA employee told me. “Toothpaste is not something they typically put out.” 
“So you don’t give ratings based on toothpaste because hotels don’t give toothpaste to their guests?” I asked. 
“Yes,” she said. 
“But the hotels told me the same thing—they said they don’t give toothpaste because of your ratings.” ... 
Hotel executives assured me that the price of toothpaste is generally “in line” with those of other amenities. “Toothpaste is not a cost-prohibitive addition,” said Sweeting of the Four Seasons. ... 
So if we can’t blame the missing toothpaste on the stinginess of hotel executives, the dereliction of the ratings firms, or the finicky tastes of travelers, then what’s left? Only the gloomy notion that we might all be equally to blame. Hotels could give us toothpaste but they don’t. No one knows why, and no one cares. It’s how things have always been, and how they’ll always be.
Correspondingly, I think one can extend this example to ask, why do governments fail to provide certain public goods even when they are affordable. And sometimes the answer is not as simple as cost, or even corruption.

A classic case of market failure. Also, from a development economics standpoint, this is probably how poverty traps work.

HT to James Choi's blog, where I first saw this.


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