Sneaky hotel surcharges surprise consumers, help hotels compete
Derek S. Key, "derekskey" via Flickr
Bjorn Hanson considers himself the world's expert on hidden hotel fees. So it was a surprise when he found an unexpected item on his hotel bill a few years ago.
It was a housekeeping surcharge — a $12 fee added to his bill for keeping the room clean.
Hanson, divisional dean of the Preston Robert Tisch Center for Hospitality, Tourism and Sports Management at New York University, contested the charge and, after a long process, had it taken off his hotel bill — something he says hotels are becoming less willing to do.
Fees and surcharges started emerging in the late 1990s, Hanson says. With the exception of 2001 and 2009, the amounts of fees have been increasing every year. The hotel industry introduced fees and surcharges before the airlines did.
"It is a significant source of revenue," Hanson says, "and an even more significant source of profit. It is unlikely that this will be anything but an ongoing, increasing trend."
Hanson's yearly survey on lodging industry fees and surcharges found a record $1.85 billion was collected in 2011. He forecasts that number will increase to $1.95 billion this year — in part due to a 3.5 percent increase in occupied hotel rooms. If the fees are a boon to hotels, they are also a bane to hotel guests who are not prepared for them. By understanding hotel fees, consumers can plan for or even avoid unexpected costs this holiday season.
Automatic and optional fees
There are a lot of ways for hotels to add on fees — both automatic and optional. Hotels can charge for grounds keeping, towels, a safe, bottled water, newspapers, air-conditioning (called an "energy surcharge"), shuttle service, baggage-holding, mini-bars (charges sometimes apply just by opening the refrigerator), parking, faxes, telephone, early check in, early check out and more.
The most common automatic charge is the "resort fee," sometimes called an "amenities surcharge." The fee can run from $8.50 to upwards of $60 per night.
Optional fees include things like room service. If a guest orders room service, there can be charges for the food and a tip. But there could also be a "service charge" or "tray charge" added on top.
The reason why hotels do not include fees and surcharges in their room rates is because travelers are very sensitive to the advertised room rate, Hanson says. "Two dollars difference on an average rate will cause a significant shift in market share," he says.
Joe McInerney, CEO of the American Hotel and Lodging Association, agrees that competition on room rates keeps fees separate. Problems may arise, he says, depending upon where you make your reservations. He says the fees are more likely to be disclosed on the hotel's website than on third-party reservation websites.
Hanson says mandatory fees — such as resort fees — will be disclosed by hotels. It may take a little searching, but they should be on the website or on the reservation confirmation email. "Guest should do research," Hanson says.
For the optional fees, Hanson says people should read the guest services directory in the guest room or simply ask.
Hanson says guests should ask questions when making their reservations such as, "In addition to the room rate, are there any other taxes, fees or surcharges that I will be charged?"
The reservation specialist can then tell about sales tax, municipal occupancy taxes, resort fees, parking fees and the like.
"No others?" Hanson would ask.
"No, that is it," the reservation person will say.
Hanson says to then write down the name and/or number of the representative.
Upon check out, if there is any non-optional fee added that you didn't know about, you can say you specifically asked about extra fees and give the name of the person you spoke with. "You can't charge me for something when you said there was not going to be such a charge," Hanson would say.
Guests should expect the unexpected — even between different hotels in the same franchise. Fees are not brand specific, Hanson says. A guest could stay in a "Brand X" hotel on the east side of Manhattan on a Monday and have certain fees and surcharges, and then spend the next night at another "Brand X" hotel on the west side and have different fees and surcharges. They also can change frequently in the same hotel.
McInerney remembers when he was hit with an unexpected charge. He came back to the U.S. in 2001 for a conference after living in Asia.
"I got in at midnight," he says, "and I spoke at 9 a.m. in the morning and left at 9:30 a.m."
Even though he didn't use any of the resort amenities, his bill included a resort fee.
"And I was not too thrilled," he says, "because I didn't know it was going to be on there. It came as a shock. But that was in 2001. Everybody is familiar with them now."
- The 10 best cities in America for job seekers...
- Why many experts missed this: Cheap oil can...
- Renovation Solutions: Top remodeling projects...
- Democrats see skimpy insurance as the next...
- The 10 best cities in America for job seekers...
- Anger builds among unionized workforce at...
- Balancing act: Survey: Millennials seek...
- How do Utah wages stack up nationally?
- Clinton: GOP threatening small-business... 19
- Democrats see skimpy insurance as the... 8
- Smith's hopes to pass savings from... 7
- 'Another piece to the puzzle': Census... 7
- Banks fined more than $5B, to plead... 6
- Utah jobless rate holds steady at 3.4... 5
- Why many experts missed this: Cheap oil... 4
- McDonald's CEO faces shareholders amid... 3