Free riding at breakfast

The lobby of the Novotel at Euston Square is a most inviting place for someone wanting to enjoy a relaxing coffee and a read of the morning papers. I got there just after 7am on Friday ahead of the ICT Conference at the British Library and ordered a coffee before checking through some emails. Little more than twenty minutes later, the team from Tutor2u were assembling for a healthy breakfast and I joined the queue with them fully expecting to be asked for my room number or perhaps checking in for a paid breakfast. Nothing happened .... I unwittingly became a free rider and happily raided the buffet for some fresh fruit, cold meats and an expresso.

Free riders are spongers who enjoy the fruit without paying a price. We were discussing this in our AS micro the other day. From using someone else’s Wi-Fi network to enjoying the environmental spillovers from another country reducing their CO2 emissions. The free-rider problem can be a cause of market failure for if too many people can get away without paying, the market may struggle to make a profit from the goods and services it supplies.

Was I guilty of a classic piece of free-riding activity?

I posed this question to my class in a lesson yesterday and expected to add it to a growing list of examples of free-riding that we were brainstorming on the board. I would be grateful if blog readers could add their own examples in the comments board so that I can produce a good list for all in a few days.

But one of my students suggested that my free ride was not the result of an over-burdened restaurant waiter (in fact there were many of them providing great service) - but instead a rational response from the hotel keen to encourage more people to stay.

The marginal cost of my breakfast to the Novotel was close to zero but the benefits to the hotel of having a group of people staying over-night paying for rooms, drinks at the bar and room service far outweighs the impact of me joining the queue for breakfast. They probably recognised me as an acquaintance of the residents and were happy for me to join them ... it must happen every single day of the week. Indeed their largesse makes it likely that I will recommend the hotel to others in the future (I will).

With a cluster of new hotels sprining up in the area, including a huge Premier Travel Inn and Costa Coffee right across the way, the battle for market share among hotels in the immediate vicinity is pretty fierce.

I’ll buy that explanation for now and I promise not to free-load every time I visit the Novotel! If you passing by and see me queueing up have a quiet word with the duty manager.