Mid last year I wanted to go on a vacation with my friends. We looked up options, compared prices, and ended up selecting Cancun as our destination and Hotel Riu as our all inclusive resort. We were all excited and got up early, around 3am, to get catch a 6am flight to our destination a few weeks later.
After a three hour flight, we arrived in Cancun and took a bus to Riu, excited to check in to our hotel, get some lunch, and spend the day lounging on the beach. As soon as we reached the Riu, we spoke to a rep at the front desk, who informed us that we’d have to wait until 2 pm for our hotel room. So there we are, tired from waking up early, exhausted from the three hour flight, with three more hours to wait before we could get our room. We opted to get some lunch and the rep at the front desk told us to come back to him in an hour and he would try to get us a room in the meantime. An hour later, our bellies nice and full with food, we went back to the front desk, where the same rep told us that he had three room choices for us and that he would like to show us.
The first room was decent. Close to the lobby, meaning convenient access to the events and beach (the elevators always had a wait but this room was not a long walk down via stairs), but not high enough up so there were no windows. No windows meant no view. The beds weren’t made, but the rep said a cleaner could come by if it was the room we wanted.
The second room was a bit better. A few floors higher than the first, with windows and even a walk out porch. The view wasn’t great, we could see half the beach and the other half was of other rooms of hotels or buildings close-by. The beds weren’t made again.
The third room was next, and it was much better than the second room. A few more floors higher, but also with a walk out porch. The view was great, pure beach, no rooms blocking the view. And this time the beds were made. All of us knew this is the room we wanted.
The rep showing us around now turned to us and said I’ve shown you guys the three rooms, which would you like for your stay? Obviously, as a rational thinker, we all jumped at the final room he showed us. Then he informed us that the maids still had a bit of cleaning to do and he wouldn’t be able to release the room until 2pm, unless of course we had given a tip. I pulled out $50 and handed it to the rep and within 10 minutes the room was cleared for us.
I knew in this moment that there was a larger scheme with these options, but I didn’t think about the implications from a psychological perspective until months later. Why did the rep show us three rooms instead of just two? Why were the first two rooms messier than the third? Why did we go to the room with no view before the room with the views (we had made it clear we wanted a ocean view room from when we first checked in).
Looking back, I think the front desk rep at the Riu hotel knew that we were rationale but still irrational thinkers. Let me explain. The hotel rep only cared about one thing: maximizing the tip he would get by giving us a room we liked and checking us in early. Through rational thinking, he knew we would be comparing the room choices to one another. The more aligned to our interests the room was, the more likely we were to take it. However, he knew the options he showed us would change the tip we gave, due to irrational thinking. If he hadn’t shown us room one, we wouldn’t have known how bad the alternatives were. If he hadn’t shown us room two, we wouldn’t have known how a room with a decent view looks like to compare to. And by showing us room three last, we compared it most to room two, which made it seem much nicer. So when he finished showing us room three and mentioned a tip, the irrational side of us jumped at the biggest tip that we thought to give, out of being scared at the thought of getting room two, or even worse room one. Comparatively, if we had only seem room one and three, we would’ve tipped smaller thinking that a small tip would be enough to swing us room three. And if we had only room two and three as options, we wouldn’t give him as big of a tip because the relative difference between the two rooms was small. By convincing us through all the factors (view, cleanliness, etc.) that room three was for us, we jumped at offering a big tip to him, just to be certain he wouldn’t give us room two or room one.
I think looking back at this entire experience, I learned a valuable lesson about how predictably irrational the common consumer is. We base our choices off other alternatives, and certain decisions can be made to throw in a decoy to get us to take certain actions (such as paying certain price points). For example, when pricing an item, throw in extra price offering to act as a decoy to get customers to buy the offering you want to sell more of. Consumers, in general, are rational thinkers who think about options in comparison to one another. But usually, we compare options from the relative value per price point meaning that there is room for swaying us to pick the item desired through new alternatives.Enjoyed the post? Share it with others!