U.S. Hotel Fees and Surcharges to Hit Another Record High in 2016

Fees and surcharges collected by U.S. hotels should hit another record high this year, according to the annual trend analysis report by Bjorn Hanson, clinical professor in hospitality and tourism at the NYU School of Professional Studies in New York City. Hanson forecasts the 2016 total to hit $2.55 billion, a 4 percent increase over last year's $2.45 billion. The total has increased every year except for brief periods following 2001 and 2008, when lodging demand fell.

According to the report, this year's boost is driven by approximately 2 percent more occupied hotel rooms vs. 2015, as well as by more categories of fees and surcharges, and higher amounts levied. It's worth noting, however, that the year-over-year increase is actually the smallest recorded since 2009. This may be due, in part, to a decrease in the fees and surcharges for high-speed Internet access.

Among the charges cited by the report are resort or amenity fees, as well as fees for early departure, late room cancellation, Internet use, telephone calls, business-center use, room-service delivery and a host of others. Those specifically levied on groups have included higher charges for bartenders and other staff, special charges for setup and breakdown of meeting rooms, and administrative fees for master folio billing.

Relatively new fees and surcharges include those for guaranteeing a specific room type, early check-in (which has become most common at Las Vegas resorts), unattended surface parking and holding checked luggage.

Hanson notes that the disclosure by hotels of these fees is gradually increasing, in response to several years of steadily growing customer protests and political concerns about the fees being hidden before the invoice was issued. In 2012, the Federal Trade Commission sent 22 warning letters to the hotel industry concerning the need to more prominently disclose resort fees.

Given that the fees represent nearly pure profit for hoteliers (many have incremental profitability of 80 to 90 percent on the amounts collected, notes the report), Hanson doesn't see the trend reversing. Nor does he see the charges being wrapped into room rates - that would subject the higher room rate to municipal occupancy taxes, for one, and while many travelers closely monitor fluctuating room rates, they don't pay attention to the fees, which change far less often. "The focus of many travelers is on the room rate," he writes, and for that reason hoteliers would be very reluctant to bundle in the additional charges.