Hotels Embracing Airline Fees Example

Total fees and surcharges collected by U.S. hotels decline to $1.55 billion last year.  Such fees are expected to rise to $1.7 billion in 2010 as a result of a number of factors:

• Hotel room occupancy projected to increase by 3 to 4 percent due to improving economy
• Broader adoption of hotel fees
• More serious enforcement of and increases in existing fees

Hotel fees and surcharges started showing up at high end hotels in the late 1990s for the right to use to resort amenities such as the pool, putting greens and tennis courts.  Currently fees are generally charged on a by-location basis rather than chain wide.

Hotel fees currently being charged include for services such as:

• Internet access, whose daily rate generally ranges from $9.95 to $19.95.
• Room service, tends to range from $2.50 to $5.95, not including tips.
• Minibar restocking fees, varying from $2.95 to $5.95 daily, plus the cost of the food consumed.
• Fee for leaving early or canceling a reservation without adequate notice usually runs the cost of one night’s stay.
• Parking fees can run between $20 to $30, or even higher, per day.
• Storing luggage, costs $1 and up per bag.

Hotels, even more so that airlines, feel that they have a very limited ability to increase their average daily rate, but they can improve their bottom line by charging more add on fees, over 90 percent of which are often pure profit.

Currently the lower priced, budget hotels, are the ones more likely to be offering free internet service as well, in many cases, as free breakfasts.

Travelers can avoid some fees, particularly internet access fees, by either participating in a hotel’s loyalty program or by earning elite status in those programs.

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