Marketplace has a new podcast for kids, "Million Bazillion!" EPISODE OUT NOW

How does a $25 room service burger not make money?

Mark Garrison Jun 3, 2013

How does a $25 room service burger not make money?

Mark Garrison Jun 3, 2013

Room service is coming to an end at the New York Hilton Midtown. In August, the city’s largest hotel will become perhaps the highest-profile property to cut out in-room dining. But scores of hotels have axed the service, citing slowing demand.

Some new hotels don’t bother to offer it at all. At the Wythe Hotel in Brooklyn’s endlessly-hyped Williamsburg neighborhood, hungry hipsters can’t dial up a late breakfast in bed. The owner says he wants people to be part of the buzzing scene at the restaurant below, not gobble omelets while watching reality TV.

Losing the luxury of room service will disappoint some business travelers (spending their company’s expense account, naturally) and children fascinated by the elegant steel plate covers and adorable little condiment jars.

It also means the end of a perk that has provided some memorable cinematic moments. The world’s most famous spy orders room service frequently. But if James Bond checks into the Hilton and hungers for a healthy breakfast of “green figs, yogurt, coffee, very black” — as he did in “From Russia with Love” — 007 will have to get take out and bring it up himself.

To find out why room service is dying out, Marketplace sent me to the Hilton on a sensitive reporting mission: Persuade strangers to invite me into their room to order food.

Fresh out of a harrowing cab ride from JFK, Australian visitors Suzette and Aynsley Waldock agreed to let me buy them room service while they unpacked. This is their first visit to New York.

“Ridiculous, way, way, way too expensive,” Suzette Waldock laughs as she scans the menu.

But Marketplace is paying, so we end up ordering a turkey club. Another item demands explanation: Cookies and milk. $20. I was deeply curious as to why these cookies were so expensive. But the guy taking our order wasn’t much of a salesman.

“I don’t know,” he concluded. “That’s what the price is.”

We bought them anyway. I offered a few sightseeing tips while waiting for the knock at the door. Finally, a gentleman in crisp uniform wheeled in the feast. Before us stood one $24 turkey club and the aforementioned cookie plate, an assortment of several types that were warm and appeared to be homemade.

Tack on an “in room dining charge” of $11, an $8.25 service charge, tax and a generous tip, and this was an $80 meal. You could  just hear Marketplace’s accountants grinding their teeth.

At these prices, one might think the hotel is making a killing. Unlikely.

“It’s very rare, if not impossible, for hotels to produce revenue in terms of room service,” says Mehmet Erdem, professor at the Harrah College of Hotel Administration at University of Nevada, Las Vegas.

Hotels typically lose money keeping a full kitchen and wait staff on standby. That’s the key reason hospitality watchers believe hotels are killing room service. In many cases, that means job cuts for hotel workers, 55 at the New York Hilton alone. For its part, Hilton says it’s ending room service because of declining demand.

That means the Waldocks will be among the last to sample this hotel’s expensive cookies and milk. They urged me to take some food with me. I declined, but when they insisted, I tried an oatmeal raisin cookie, the most expensive of my life. It was pretty good, though not the best I’d ever had. But since it came via room service, it’s part of a vanishing breed and as such, was something special.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.