The big idea: A “some things inclusive” resort
All-inclusive resorts give you everything for free - so nothing feels special. What if we randomized what was included instead?
All-inclusive resorts are sort of mediocre. That’s not a knock on the locations themselves. Often, they’re extremely nice and meet their purpose of getting you drunk and well fed. But when everything is free, nothing feels quite as special - getting the free lamb shish kebab isn’t a memorable moment, it’s all included!
Compare that to unexpectedly getting an item for free (“comped”) at a restaurant. When a restaurant brings you an extra dessert or a glass of champagne you feel like a VIP; when a hotel gives you a room upgrade you feel like you got an amazing deal. The fact that it’s unexpected makes it better.
What if we could recreate that feeling throughout your entire vacation by randomly distributing what’s included and what’s not? Introducing: the world’s first some-things inclusive resort.
What is a some-things inclusive resort?
It’s like a normal resort, but some things are inclusive. Which things? Everything.
Your room? Some nights might be free. Your meals? The steak might be comped, but your second glass of wine isn’t. That kayak ride? Free for you, but not for your partner.
When signing up for the resort, you’re quoted an expected price. Throughout the trip, you’re charged like normal for everything you buy - but every purchase has a random chance to be comped. Depending on your luck, you might end up with half off your vacation or pay nearly twice what you expected.
You may think this sounds dumb1, but there’s a lot of (sometimes disputed) research about how free stuff impacts behavior:
The Zero Price Effect: People go absolutely bananas when they get something for free. There’s evidence that this is especially true for hedonistic products - e.g. things like that extra dessert. By dropping the price to $0, the things that get comped will feel more valuable.
Gifts vs discounts: Research shows that a gift is valued more than an equivalent discount, even when rationally a discount is worth more. Giving a higher price with an occasional comp may feel better than a discounted overall rate.
Status: A comp makes you feel important. If we lean into the VIP aspect, guests will associate a visit to the resort with both the direct benefit from the comps and from the memory of feeling like a VIP.
Random reinforcement: B.F. Skinner - the guy from your psych 101 class - has a whole book about what triggers behavioral responses. Inconsistent rewards bring about a gambling like feeling with each purchase that reinforces behavior2 - in this case, buying more things.
All together, we’re creating more than the sum of its parts - an environment where comps bring as much joy to the experience as the activities itself.
Enhancing the experience even more
So how could we maximize the joy that guests get from their comped items? An easy one is making a big deal about it - don’t wait for them to get their bill, bring out their comped champagne with sparklers. If you get a free scuba diving lesson, everyone else is going to know about it when the diver gives you a golden oxygen tank. A full marching band comes to inform you that your last night is free. Everyone is a VIP!
And some people can be more VIP than others. Maybe there’s a few ultra-luxury suites that are only given out randomly - if you’re the lucky guest, enjoy your butler and in-room sauna. If you didn’t get it on your first visit, it’s a great reason to come back and try your luck again.
What would happen when things are totally randomized?
People respond to incentives. If each item has an equal chance to be comped, you’ll see guests buy a lot of expensive things to maximize their chance of getting something expensive for free. But this is actually a losing strategy; if you buy lots of expensive things, then you’re going to pay full price for all of the stuff you don’t get comped!
In this way, the comp structure subtly encourages higher levels of aggregate spending. This may actually allow the resort to maintain similar prices to competitors - if everyone is buying the nice bottle of wine every night, it’s ok to give one out of every 20 away.
Of course, as guests start to realize they’ve bought four extra steaks to get one free, they may start looking for patterns. You’ll start to see a chorus of rumors start flying as guests begin to imagine connections. “If you wear a hat, you’re more likely to be comped at breakfast” or “never just buy one dessert, you’re more likely to be comped at 2+.”
Over time, people start to figure out the game theory. For risk averse people, quantity reduces variance. You may start to see ad-hoc pairings of vacationers - think groups of 20 people agreeing to split the value of comps between them. Not only are we creating social bonds - is there anything more intimate than forcing people to exchange Venmo accounts? - we’re creating an environment where spending increases. You’re much more likely to buy that bottle of wine when you have new friends to share it with.
Free things create memories
All of that behavioral economics at the beginning builds to a bigger idea3. People really cherish and remember those unexpected moments when they get something they don’t expect to. As time passes, the memory of the times they paid full price will fade, and the memory of their complimentary Peking duck will remain. The nostalgia effect is really strong, and we’re weaving it through your entire vacation.
Bringing it home
But why stop at a resort?
Randomized pricing exists today in all kinds of digital products - if you’ve ever played a video game, you’ve opened a loot box with a random chance of an item. The first time I opened Temu I had to spin 15 different roulettes that gave discount points. DoorDash randomly gives you free delivery. Uber occasionally surprises you with upgrades. The feeling of unexpected gifts is really powerful!
Why do we have to stop in the digital world? I bet there’s a company to be started that brings the some-things inclusive ethos to the physical world. Charge a monthly fee ($20 a month for a 1% chance of a comp?), pair the user’s credit card, partner with retailers, and add social features so people share.
Presto, occasionally something you buy - your coffee at Starbucks, the cabbage at the grocery store, or, if you’re very lucky, your new car - gets comped for you unexpectedly at purchase. When you get a comp, your phone does a big celebratory animation as the money is transferred to your account. Maybe you even get a spin at a prize wheel if you share a photo on Instagram.
Companies would rush to sign up for this! You’re giving customers who get a comp a positive memory at your establishment and a tailor made moment to share your product on social media. They’d probably even cover the cost of the free item to get that exposure!
And unlike gambling, users are buying things they wanted anyway - you’re not training your customers to expect discounts. The future of retail might not be predictable discounts, but the thrill of maybe getting something for free. Maybe the some-things inclusive resort is a preview of how we'll all shop in the future.
Official idea rating
4.6 out of 5 stars. The hardest part of running this is going to be escaping the unlucky loner who paid 7 grand and only got a free soda from demolishing you on review websites. But randomness is probably coming to more places in the world - I’d rather it be truly random than have an algorithm send me a push notification for a free cheesesteak at 11pm4. The future of business might benefit a bit from the thrill of the unknown.
There are no dumb ideas
Granted he did it with pigeons, but the same idea applies
There are only big ideas
The algorithm will successfully manipulate me
I can see that people might enjoy(ish) this, but I think I would immediately run screaming.
The base idea here is really interesting. How will the numbers work out? Some Indian apps like Cred do this with randomized rewards on credit cards payments, but the payments are so few and far in-between that customers stop expecting anything meaningful after a while (I get a nickel's worth on a 100 dollar spend if I'm lucky, zero usually).
Also, people get used to rewards really fast (https://youtu.be/FdkQwQQWX9Q) and they get upset when something they've taken for granted is taken away. There could also be an optimal mix between novelty and stability for happiness (Derek Thompson discusses this in his book "Hit Makers". A customer who is charged for dinner but gets dessert free is likely to be happier than randomly getting a few items comped. This could be worth exploring.
The idea that people start sensing pattens between their actions and outcomes is really powerful! If people feel a sense of control, it gamifies them even more and turns on the gambling instinct. Lots of interesting ideas here, but I'm curious which one would give the most bang for buck to start with.