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Subscribe to RSSIf you’re staying at a hotel or resort in the coming months, Bjorn Hanson has a little advice:
“Before you buy, use or do anything, ask if there’s a fee or charge involved,” said Hanson, who studies the lodging industry as dean of the Tisch Center for Hospitality, Tourism and Sports Management at New York University.
Why? Because according to Hanson’s research, U.S. hotels will take in an estimated $1.8 billion in add-on fees and surcharges this year. That’s a small (6 percent) increase from last year — due mostly to increases in occupancy, he says — but up a whopping 50 percent from the $1.2 billion they collected in 2000.
“They’ve become institutionalized as a revenue source for many hotels,” Hanson told msnbc.com. “They’re becoming more widely practiced and more guests are being surprised by them.”
Among those surprises:
- Baggage-holding fees: Checking out at noon but not flying home until 6 p.m.? While some hotels will still store your luggage for free, more are charging for the service. “They’re charging $1 to $3.50 per bag,” said Hanson. “That’s in addition to the expectation of a gratuity.”
- Minibar-restocking fees: According to Hanson, more hotels are charging a fee of $2.95 to $9.95 to restock minibars if even a single item has been removed. If you can’t resist the urge, “maybe you should buy more items to amortize the expense,” he said.
- Resort fees: These fees, which typically cover bottled water, use of the in-room safe, access to the fitness center, etc., can run between $8 and $40 per day. Worse yet, they’re generally mandatory, which means you’re charged whether you use the amenities and services or not.
Live Poll
What industry is most likely to hit you with fees?
“People hate resort fees more than anything,” said Anthony Curtis, who monitors the Las Vegas lodging scene as president of LasVegasAdvisor.com, an online newsletter. “We try to make the point that they can be reasonable if it’s something most people would use anyway, like Internet access, but people just don’t buy it.
“Our readers tell us it feels like a bait and switch,” said Curtis. “They’d rather see a higher rate that’s all-inclusive.”
Alas, the evidence suggests that travelers are more likely to see those higher rates but no decreases in add-on fees and charges.
“As hotel occupancy recovers, it will provide a sense of confidence on the part of hotel executives to implement more fees and increase the dollar amount of existing fees,” said Hanson. “Larger increases are ahead.”
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- Expect fewer travelers, crowded planes this Thanksgiving
- NYT: Mobile boarding passes gain traction
Rob Lovitt is a longtime travel writer who still believes the journey is as important as the destination. Follow him at Twitter.
Leave a Comment:
Wow, hotels try to generate revenue, what's next Ugg boots really aren't worth $125.
you have to complain and loudly. Take your business someplace else and let the CEO know about it. He is the one who ultimately orders the fees to be instated and to be removed
Fees shouldn't qualify as revenue.
The whole idea of a "fee" in business is such deceptive BS anyway! Frankly, it should be illegal as far as I'm concerned.
Businesses should only be able to earn revenue based off of their price for performing their service for you.
The government has a mandate with regard to warranties, requiring that if a business supplies a warranty on a product, that they actually have a fund set aside for servicing it, and that that money cannot qualify as part of a company's cash...it must be treated as a unique type of contra-account similar to allowance for bad-debts.
Fees at the very least should not be able to qualify as any kind of revenue for a company...PERIOD!
Charging a fee after the fact is a clear violation of bait-and-switch because the fee is obviously instituted in order to both subsidize a lower advertised price while also reducing the amount that a customer can consume once they purchase the main product (airlines, cellphones and commercial banks anyone?)
This is why government regulation is needed in these types of instances, because businesses, if left to their own devices will simply see how much they can get away with until their customers revolt...but if there's no real alternative, these fees become an unwavering industry standard!
Disgusting
There's a difference between "generate" and "earn". If you agree to buy something for $100 then the seller demands $140 after you already agreed upon the price, they're trying to generate revenue not earn it. The mob tries to generate revenue, a business should earn revenue. Spot the difference?
@ Alverant
Agreed!
And in addition, these "fees" are something that cannot necessarily be removed by free market forces alone (e.g. customers voting with their feet so to speak). Without a viable alternative for angry customers to switch to, companies can charge fees and not worry about losing their customers to other competitors or alternative products that fill a similar niche
Take for example airlines, which all have "baggage fees" even after oil prices went back down! The justification for those fees in the beginning was to cover that added cost of fuel from handling all of those extra pounds of cargo that people would lug on with them.
Well, fuel prices are lower again...why haven't the fees been removed? Simple, it's easy money...doesn't cost the airlines anything extra to get that extra bit of money...and as long as they are allowed to treat it as revenue...the shareholders love it even more...and if THEY love it...executives will try to do as many new fees and gimmicks as they can.
Typical business thievery. I don't mind paying reasonable fees for service but most companies want to rip you off. Charging for services you don't use should be a crime. I guess people don't do favors anymore without some sort of compensation. What a bunch of Ferengi.
"Charging for services you don't use should be a crime."
It should, but this has absolutely nothing to do with the article.
The article is generating news here. It says occupancy has grown 5% over last year, then talks about how revenue grew 50% since 11 years ago! The article is just finding ways in which businesses are making money (by offering services people DO USE) and castigating businesses for it.
So you're saying that if a business does it, then it's OK? By that logic mugging people should be acceptable because they too are finding ways to make money. If a hotel charges for a service people use, then they should not charge if the service is NOT used. Mandatory fees that are not mentioned before the contact is signed should be considered theft.
The biggest problem is that fees are being used as a means of disguising the true price of the service that businesses are offering.
It's deceptive pricing and it is illegal in every other regard such as product tying and bait and switch. Fees are the new buzzword for basically making the initial purchase product something that no one really wants when they look at it, and realize that they will have to pay a certain amount more to get the product as first advertised!
You are all going by the pretext that these fees are not advertised. They are. No one is being decieved. It's usually not even hidden in the fine print.
Sounds like they took their business model from the U.S. Government.
Naw...they learned from the airlines!
F them all! I hope they all get Netflixed. Look at what happened to them, and to the BoA debit card fee. People are fed up with the swindles (or I guess you could say "We're mad as h_ll and we're not going to take it any more."). This will just end up in another customer revolt and more business for Motel 8 while the big boys go begging. People are through taking whatever new ripoff corporations decide to try to foist off on them. They need to read the news and wake up before they push their customers over the edge and they flee en masse the way BoA and Netflix are seeing.
A few weeks ago I stayed at a small private hotel that was about half the rate of others in the area, had great rooms and a great coastal view, great service (including free shuttles into the shopping areas, free breakfast and free wi-fi). They were honestly happy to see us and made us feel welcome and went out of their way to help us enjoy our stay.
I contrast that with a higher priced Wyndham hotel that we stayed at immediately prior. Small, smelly, dirty room, terrible service (breakfast took 45 minutes to arrive after ordered, was lukewarm at best, waitress brought the check then disappeared for 25 minutes etc. and they had the entrances between buildings and the associated walkways closed and they obviously had been that way for quite a while). Their excuse for the smelly room? Oh, they had converted that building to non-smoking a year ago but hadn't replaced the carpet, window treatments or wall coverings yet! I don't call that a non-smoking room! They had no shuttles and charged for breakfast and internet.
And the small hotel had a later checkout time than the big chain one!
Is it any surprise that we will never stay at a Wyndham hotel again, but we have already booked our next stay at the small private hotel?
Netflix didn't exactly lose customers "en masse." They lost some 3%. Lots of bad PR though.
AG, I think you should find newer statistics. You're low-balling by at least 100%.
Wasn't it 800,000 lost or did that increase?
@ AG999
The 800K was the amount of customers they lost in just 3 months, which forced them to lower their forecasted customer growth by a full ~1million subscribers or 4% lower than their prior estimate.
http://money.cnn.com/2011/10/24/technology/netflix_earnings/index.htm
On top of that, they're still losing customers left and right from the unfavorable momentum they've created for themselves.
I foresee their next quarterly report to have even fewer subscribers as customers fee to alternatives with better practices and consistent pricing policies.
Ah.
I already fly as little as possible thanks to the airlines' chicanery. Now I guess I won't be travelling much at all.
The so-called "Hospitality" Industry is sure getting INHOSPITABLE !!! BEST TO ***STAY HOME*** UNTIL THEY LEARN SOME MANNERS !!!
Don't complain, don't argue, just don't go. Try going the B&B route.
You stay with people that know the area, restaurants, events, etc. People generally take pride in their places, serve great breakfasts and are often cheaper than chain hotels.
Hotel prices are as capricious as airline tickets. Recently I stayed at 3 motels for less total than one night at a hotel in a college town. The bed and bath were not $100 better than the cheaper ones. It is really based on what the public will bear.
As a hotel employee, I must say that the only way to compete with other hotels that have resort fees is to have resort fees yourself...think about it: You see a hotel selling a room for $130 and one selling for $140. Same kind of hotel & same grade. Which one will you choose? The $130 hotel is probably your answer, but what if the $130 hotel has resort fees and the $140 hotel doesn't? Will you go the extra mile to research? Many don't. That's why you're surprised when you check in.
What I'm trying to say is that the resort fees cannot be included in the advertised price, as this puts the hotel that does at a disadvantage. You can blame the hotel industry for starting this up, but many hotels HAVE to do this to keep their competitive edge. Many hotels try "we don't charge resort fees" marketing strategies, but the big wholesalers (Expedia, Travelocity, Costco) don't care about your plight.
It's easy to blame the industry, but the dynamics are a lot more complicated than what is mentioned here in the article.
So what if it puts the hotel at a disadvantage? Mandatory fees should be included in the price because there's no way to avoid them. What you are trying to do is justify fraud on the basis that not doing it will cost you money. Only criminals try to justify their crimes.
Putting my hotel at a disadvantage is putting my job on the line. If the industry trends are pushing towards resort fees, what can you do other than go with the flow in order to keep afloat? I am simply trying to say that there are two sides to this coin. On a different note, are you surprised when there is a 14.962% tax (in Hawaii) added to your hotel bill? That is certainly not included in our advertised prices.
I'm not saying I agree with the fees, but it's not fraud nor am I a criminal. It's advertised and clear that there is an additional fee. Do your research, and understand what you are going to get. If you don't like it, book a different hotel. Everyone has the power of choice.
Yep, right up until you run out of alternatives.
How does one avoid "fees" that are a placeholder for "added revenues" when it becomes an industry standard? Couch-surfing? Charter your own jet?
I get that these companies, like airlines are all following suit, because after all, why would any company leave money on the table if they don't have to!
The problem is that these "fees" are being used to say "with rooms as cheap as $$$ amount (some fees apply)"
I don't care if you give me a little disclaimer, the company is still not showing me their actual rate that I will pay out of pocket (an no, I'm not talking about the state taxes)
What's to stop the company from saying that their 5-star hotel suite is $50/night (some fees apply), and those fees amount to a mandatory $250/night?
I'm certain that in the coming decade, the practice of applying fees for a product, and unbundling services (without advertising how little is provided at the basic rate...similar to how Cable/Satellite advertise) will ultimately result in Congress passing a law against it just like we've seen with product tying and the do-not-call list.
I am surprised they didn't mention the "parking fee". I think it is funny how you go to a hotel and they actually charge you to park in their parking lot so you can stay there. And, it is usually not cheap either, $20 to $30 per night. I mean, other than the traveler that flies in and uses their shuttle service, who really doesn't have to drive to a hotel? The service industry used to be about providing the BEST service and the lowest possible price. Now it is about who can charge the most for the least amount of service. The customer really doesn't matter to them any longer.
These fees are now so much the norm that I just pick up the phone to compare rates instead of booking on line so that I know the real costs. It's the only way to compare. Here's an example...
I was driving to the Miami area, but needed to spend one night in Orlando. All the hotels around the parks were packed with resort fees. I stayed a little away from there (I wasn't going to the parks this trip anyway) and I stayed at a great place with free parking and no resort fees. Even though the room rates were similar, I saved about $50 just on fees!
It pays to spend a few minutes and make a few calls. It's not THAT much of a hassle.
@ Gregorovich
It's nice when you can comparison shop like that, but you have to admit that fees are being used in order to deceptively price.
It's a shame that the government no longer seems to be looking out for the consumer, because originally, deceptive pricing and product-tying were illegal, now it seems that it is a grey area that businesses are able to get away with.
As a frequent traveler I understand the fees hotels are charging. They, like the airlines, are losing money and revenue due to the economic downturn. Those willing to travel are already qualified customers and easy targets for hidden/add on fees for services typically free.
Through partnerships with Hotwire, Priceline, and Travelocity they are booking un-sold rooms but at half the retail price they charge everyone else. The only way to make up some of the difference is to charge for additional services in hopes that they generate ancillary revenue.
My problem is that they, like the airlines, are not improving service for the additional fees they charge. Consider airline baggage fees-they force you to lug it and still pay for it. That just doesn't make sense.
I actually ship my luggage ahead of time to avoid this ancillary fee with no "justified service improvements". I use a company called LugLess (www.lugless.com). The point I am making is that the hotels can charge fees for extras but they should make the customers feel like they are paying for better service, not just changing the model on them without making it more efficient and customer-friendly.
Jim,
Not everyone in the hospitality industry lacks "manners". that is an unfair generalization. how would you like to check into a hotel and be treated badly because everyone generalizes that all hotel guests are rude and lack "manners". you would not like that one bit i would imagine.
I do work in the hospitality industry. i make minimum wage but i don't complain. i love working in the hospitality industry. every guest is unique and i love to meet and greet. it is very rewarding. that being said, yes i do encounter my share of rude and demanding guests. it is my job to make sure my guests are happy during their stay and i give 110% all the time. but sometimes a demand is ridiuculous and unfortunately i must say no. does that make me rude? does that mean i lack manners? no. it simply means that i cannot accomidate every request. i can accomidate reasonable ones but unreasonable ones, such as wanting me to book a booth table in a trendy restaurant that has been booked solid for over a month, that is unreasonable. wanting a complete refund on the room after staying all night simply because for one minute the internet router went off-line. that is unreasonable.
Manners go two ways. i will treat you with respect if you treat me with it. i will even go out of my way to give you free perks of the hotel, such as a free dinner in the restaurant, a free massage, free movie rentals or a free upgrade to a suite, simply for being respectful. most people do not realize the effort that goes in to making your stay look so effortless. but that is the job of all hotel employees, especially the desk clerks and we take great pride in it. but it is becoming a rarety to be treated with respect. when we are it is treasured and makes our week. we will bend over backwards to make sure your stay has that extra oomph to it...simply because you smiled and said hi. but if you come into the hotel expecting the moon for a low price and then take it out on any of the staff...again respect is a two way street. we will still ensure your stay is pleasant within reason, but we will also not go out of our way to give the oomph factor.
all it takes is respect. and as for hotel fees, all fees are negotiable. just ask. be polite and show respect and you will be amazed at the perks you will receive.