Lodging Fees Could Climb by 5 Percent This Year
Fees and surcharges collected by U.S. hotels this year could reach a record $2.47 billion, according to Dr. Bjorn Hanson, Ph.D., in his annual trend analysis report. The clinical professor at the Tisch Center for Hospitality and Tourism, in the NYU School of Professional Studies in Manhattan, noted that last year's record of $2.35 billion would be eclipsed due to approximately 3 percent more occupied rooms this year, as well as higher fees and surcharges and a greater number of them. The total of fees and surcharges have increased every year since they were introduced in 1997, except for brief periods of declined demand following 2001 and 2008.
Among the laundry list of charges are fees for resorts or amenities, early departure, reservation cancellation, Internet access, telephone surcharges, faxes, shipping and receiving of packages, room service delivery surcharges, mini-bar restocking and in-room safe use. Groups have encountered increased charges for bartenders and other staff for events, extra fees for setup and breakdown of meeting rooms, and administrative fees for master folio billing. Charges for unattended parking and holding checked luggage are increasing in frequency as well.
The Federal Trade Commission issued 22 warning letters to the hotel industry in 2012 concerning the need to clearly disclose resort fees in advance. As of this summer, however, the FTC hasn't ruled the fees inappropriate as long as they are disclosed. According to the report, fee disclosure continues to increase, via websites, confirmation emails, tent cards in guest rooms, room service menus and guest service binders.
Hanson names several reasons that the fees and surcharges are not typically included in room rates: Higher rates would be subject to more local taxes; fees and surcharges tend not to change as frequently as room rates, and planners and travelers often focus on the room rate to determine value. Additionally, the fees and surcharges are cash cows, many with incremental profitability of 80 to 90 percent of the total amounts collected, according to the report.