Following the 2013 record of US$2.1 billion, total fees and surcharges collected by U.S. hotels will increase to another record level of US$2.25 billion in 2014, according to new data from the Preston Robert Tisch Center for Hospitality, Tourism, and Sports Management at New York University’s School of Professional Studies.
The increase for 2014 reflects a combination of approximately 3.5% more occupied hotel rooms than in 2013, more fees and surcharges, and higher amounts charged at many hotels for a total increase of approximately 6%.
Fees and surcharges emerged as a common industry practice in 1997. Another phase for fees and surcharges was when energy surcharges were introduced in 2000.
Examples of fees and surcharges include: resort or amenity fees, early departure fees, early reservation cancellation fees, internet fees, telephone call surcharges, business center fees (including charges for receiving faxes and sending/receiving overnight packages), room service delivery surcharges, mini-bar restocking fees, charges for in-room safes, automatic gratuities and surcharges, and baggage holding fees for guests leaving luggage with bell staff after checking out of a hotel but before departure, and charges for unattended parking. For groups there have been increased charges for bartenders and other staff at events, special charges for set-up and breakdown of meeting rooms, and fees for master folio billing.
U.S. lodging industry fees and surcharges have increased every year except for brief periods following 2001 and 2008 when lodging demand declined.
Fees and surcharges are highly profitable; most have incremental profitability of 80% to 90% or more of the amounts collected.
Dr. Bjorn Hanson, a clinical professor at the Preston Robert Tisch Center, said the figures are estimated based on selected interviews with industry executives and corporate travel executives, analysis of industry financial data, press releases, and information available on hotel and brand websites.