As for the $82 million a year in revenues the media is reporting hotels are splitting with USA Today from 420,000 copies a day being charged to hotel guests based on 75 cents per copy, the hotels are seeing zero dollars in revenues. USA Today charges the hotels a much lower per-copy rate, and when you factor in its printing and delivery costs and any financial considerations it is extending the hotels, there might be a few million dollars left as net revenue if anything at all.
When it comes to circulation reporting, try thinking “location, location, location.” There was a time when copies of USA Today distributed in hotels were not included in paid circulation averages in ABC reports. They were relegated to third-party (bulk) sale — copies that had minimal, if any, advertising value and were listed underneath paid circulation. This is in direct contrast to copies purchased by individuals such as home delivery and single copy sales. To put it in advertisers’ terms: individual = good; bulk = bad.
Hence, “disclaimer circulation” was born. Instead of taking affirmative action to buy a newspaper, customers must take negative action to not get it. At hotels, this is done through small print verbiage intended not to be seen by guests that reads:
“I have requested delivery of USA Today. If refused, a credit of 75 cents will be applied to my account.”
The newspaper does not appear as a charge on the guest invoice, and attempts to secure refunds are futile as most hotel personnel maintain that the newspaper is complimentary. Executives from large chains such as Marriott and Hyatt, where guests were receiving USA Today via disclaimers on key card packets and/or registration forms, said that guests were not being charged for the newspapers. They said their hotels used the disclaimers in exchange for lower rates from USA Today and to help the paper in how it was reporting the copies.
As a result of disclaimer circulation, hundreds of thousands of hotel bulk copies were elevated to single copy sales, represented to advertisers as copies ordered and purchased by individuals even though that never has been the case.
In a U.S. News and World Report story (Dec. 2, 1996) titled “At Least It’s Free, Right?” USA Today vice president of circulation Denise Restauri said a hotel bill can mask a multitude of illusory freebies. “The hotel charges you for everything,” she said. “If the hotel gives you shampoo they may not put it on your statement, but you’re not getting it for free.”
In a column I wrote for E&P (Sept. 13, 1997) titled “Exploiting Bulk Paid Circulation,” someone in Restauri’s department told me, “The guest does not pay for the paper, the hotel does. The reference on the registration card is for circulation purposes, enabling USA Today to increase its paid numbers. If it wasn’t done that way, we’d have to count it as bulk.” When asked if hotel guests pay for USA Today, Restauri said the paper complies with ABC rules.
In 2007, I started asking hotel chains participating in disclaimer circulation programs, “Am I paying for my free USA Today?” Personnel from customer service reps to executive vice presidents all maintained that the newspaper was free. Perhaps Keith Thomas, a corporate regional liaison for Marriott, said it best: “Please be advised that regardless of what you may have read on key packets in the past, newspapers have traditionally been provided as an amenity.”
Pete Sears, senior vice president of operations for Hyatt, was one of those I spoke with who mentioned lower costs and circulation reporting. “By including this verbiage on the guest folio, the newspaper companies are able to include our daily newspaper spend in their circulation count,” Sears told me. “In exchange for very favorable ‘subscription’ pricing, we have agreed with our newspaper partners to reimburse any guests (newsstand price) should they decline the paper. The cost of the paper is in no way added to the cost of your room.”
Class action lawsuits brought by guests against hotels are nothing new. Chris Woodyard of USA Today wrote (Sept. 26, 2004) in an article titled “Hotels face lawsuits on surcharges for phones, energy” that “Lawyers are turning the tables on hotels that ding customers with hidden surcharges for everything from pools to electricity.” He went on to write “Some chains are settling class action lawsuits that allege the extra fees weren’t fair because customers weren’t told about them in advance. Customers get coupons for discounts off their next stay. Attorneys get big fees.” While surcharges for energy and telephones and mini-bars and resort amenity fees and restocking fees show up as line item charges on guest invoices, newspapers do not.
Beginning with the March 2011 publisher statements filed with the ABC, most other paid circulation such as NIE, employee copies, and third party is no longer included in total average paid circulation, and instead shows up as verified circulation. However, the two notable exceptions are hotel distribution-guest refund and hotel distribution-room/lobby copies.
Most newspapers have greatly reduced or eliminated hotel distribution. For 630 newspapers that filed March 2011 publisher statements, the total hotel circulation — not including USA Today and The Wall Street Journal — came to around 200,000 copies a day, with close to half not reporting any, and two thirds reporting less than 100 copies a day. USA Today reported averages of 420,832 for guest refunds and 551,000 for room/lobby copies for a hotel total of 971,832 copies; 971,832 copies that continues to count as part of its total average paid.
Lawyers that I’ve spoken with feel that any class action lies with advertisers against USA Today for how it is reporting circulation, and not against the hotels since they never collected any monies from the guests.
Hotel disclaimer circulation has dropped from a high of 834,860 copies on the September 2008 Publisher Statement to 420,832 copies on the March 2011 Publisher Statement. Chances are as a result of the recent lawsuit against Hilton hotels, regardless of the outcome more hotel chains will opt out of referencing copies of USA Today on key card packets and registrations as did the Marriott a few years earlier. Perhaps it is time for USA Today and ABC to drop the facade of individual hotel guests ordering and paying for the newspaper. Instead, let the circulation reports acknowledge that the hotels are paying for all copies they receive and list them as follows:
- Distributed directly to rooms
- Made available to guests
Jay Schiller is a former auditor with the Audit Bureau of Circulations.