Record-high hotel fees may start to plummet
Record-high hotel fees and surcharges jumped another 7% last year but in good news for business and leisure travelers, there are signs they may be stabilizing, based on a PricewaterhouseCoopers study.
“Many of these charges, which generated $1.6 billion in revenue for the industry this year, apply to corporate groups, and some meeting buyers said they are fed up with the so-called nickel-and-dime approach,” said Business Travel News Online.
Three years ago, the industry generated just $550 million in fees and surcharges—meaning fee revenues have roughly tripled since 2003.
“The increases are slowing every year. We haven’t put out our forecast for next year yet. My guess is it will be similar to the 7% number,” said Bjorn Hanson, principal of PwC’s hospitality and leisure practice.
Half of the 7% increase in revenues this year from surcharges can be attributed to the 3.1% increase in occupied rooms.
Typical surcharges levied on groups include increased bartender charges, cancellation fees, master folio billing fees of up to $1,000, automatic gratuities, resort fees and earlier room block guarantee date requirements.
Resistance to increased and new surcharges have apparently done little to deter properties from charging them.
“Guests continue to express concern over undisclosed fees and surcharges, but hotels have become much more educated as to which fees and surcharges guests will accept. They have invested in training front-office staff on how to respond to objections raised by guests, so there is better response on the hotels’ part,” Mr Hanson said.
Some buyers said they rely on their own budgeting tools rather than take a chance on hidden fees and surcharges.
“We have our own system that gives our clients the cost of the hotel very accurately,” said Eugene Emond, event management executive for Princeton, N.J.-based drug research and development firm Covance Clinical and Periapproval Services. “I really haven’t been surprised at fees.”
In general, hoteliers have become better at the upfront disclosure of mandatory fees, such as phone charges or mini-bar restocking fees, than they have been of optional surcharges, such as Internet charges or room service delivery fees.
Even surcharges that meeting buyers are used to seeing on their final bill are rising. Fax service, for example, has risen from an average $1 per page to up to $5 per page at some properties.
The battle over hidden hotel surcharges has reached U.S. courts.
In July, Wyndham International Inc. reached a $2.3 million settlement over undisclosed automatic surcharges in a lawsuit filed by the state of Florida on behalf of its own government travelers.
Under the terms of its settlement, the company agreed to clearly disclose any automatic fees, such as resort service charges and transportation surcharges, when a reservation is made. The case, as well as growing complaints by buyers about undisclosed hotel fees, may bring about a change in how properties list their pricing, say industry insiders.
Report by David Wilkening
David
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