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As a value consumer, I only sometimes pay a premium to justify a higher quality product or added convenience. In many of those occasions, such as booking a hotel for a recent vacation, paying a premium is worth it.
When I was booking a hotel for our beach vacation, I had to choose between Hotel X (expensive) and Hotel B (budget). Although both had the same number of "stars," the per night rate of Hotel X was $100 more than Hotel B. However, all things considered, Hotel B was not really $100 cheaper.
Location
While both hotels were beachfront, Hotel X was a block away from the city's best shopping and dining. The beach too was wider in front of the hotel. Hotel B was a 15 minute walk from the heart of town.
Meals
Hotel X had multiple on-site, stand alone restaurants. Hotel B had a kitchen that served a buffet breakfast till 10 a.m. for $12 per person. If we didn't want breakfast at the hotel, we would have to walk 15 minutes to get food. Hotel X provided us with a $5 credit for Starbucks coffee.
Wi-Fi
Hotel X offered free Wi-Fi internet connection. Hotel B charged $10 per night.
Beach service
Free beach service provided by Hotel X sounded like expensive and unnecessary pampering, but since we were traveling with a young child, we needed an umbrella and chairs. It was also a hassle to carry towels back and forth. Hotel B rented beach umbrellas for $12 a day, and chairs at $6 each. For us, the cost would be $30 a day to rent.
Elevator
Hotel B did not have an elevator as it was two stories tall.
Complimentary add-ons
Hotel X provided a complimentary pack and play and microwave on request. It also had a free library of children's DVDs and board games. Hotel B charged $5 a night for each item.
I calculated that all things considered, Hotel B was $45, not $100 cheaper that Hotel X. If we spent less than $12 per person on breakfast, the cost difference would be even less. With Hotel B, I would have to pack extra items and spend a longer time away from the beach. The logistics of getting food, dragging additional items 15 minutes each way and up the stairs, while carrying a child seemed like a vacation spoiler. I chose Hotel X. We had a relaxing vacation, even played a board game on a morning that was too chilly to go to the beach. In the end, the better location, convenience, and additional services were worth the price premium.
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