Offering items at street prices boosts Virgin Hotel's minibars

This article is part three of a three-part series on managing minibars. Part one is here while part two can be found here.

Virgin’s first hotel opened earlier this year in Chicago. The hotel brand’s overall philosophy is not to nickel and dime its customers, said Doug Carrillo, Virgin’s vice president of sales and marketing. “Consumers have been ripped off with fees and upcharges,” he said. “Virgin isn’t about that. There are no extra fees for anything—not for early departures, late checkouts, upgraded Wi-Fi, and the minibar.”

All of the items in Virgin’s minibar, from the M&Ms to the wine, are priced at or near street prices.

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“Minibars have never been a profit center although technology has made it better,” Carrillo said. “The minibar experience is a great amenity that guests really appreciate but it has been a pain point for guests with its traditional high pricing.”

Carrillo said the hotel is charging items as close to street pricing as it can. “It’s not a money-maker for us. We are happy to break even but we’re having happy customers so it’s worth it for us,” he said. “We take away the charges and we get more returning customers.”
Because of Virgin’s pricing methodology, more guests buy more from the minibar. “The most important thing to us is that we’re not upsetting customers,” Carrillo said. “We focus on the profit from room sales, and food and beverage.”

The hotel offers the staples such as chips, candy bars and protein bars but also tries to offer a variety to serve different dietary needs and desires. “Some minibars try to get too cute and too fancy but we really want to get to know the customer and what they need,” Carrillo continued.
Virgin’s frequent traveler program, The Know, is more about guest preferences than points. Through the program, guests can make special minibar requests, such as adding or removing items or ensuring a special beer is in there—again all at street prices.
“If we take away all those extra charges, we get more customers returning to stay with us,” Carrillo said.