Following the 2012 record of US$2 billion, total fees and surcharges collected by U.S. hotels will increase to a new record level of US$2.1 billion in 2013.
The increase for 2013 reflects a combination of approximately 2.25% more occupied hotel rooms than in 2012, 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 with resort fees, one of which was called an “amenities tariff.” Energy surcharges were widely introduced in 2000. U.S. lodging industry fees and surcharges have increased every year except for brief periods following 2001 and 2008 when lodging demand declined.
Although the lodging industry initiated fees and surcharges as a common practice before the airline industry, the airline industry collects significantly more than the lodging industry, approximately 10 times more. 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 (i.e. charges for receiving faxes and sending/receiving overnight packages), room service delivery surcharges, mini-bar restocking fees, charges for in-room safes, and automatic gratuities and surcharges. For groups, there have been increased charges for bartenders and other staff at events; special charges for set-up and breakdown of meeting rooms; fees for master folio billing; and baggage holding fees for guests leaving luggage with bell staff after checking out of a hotel but before departure.
A new emerging fee is for suburban and airport hotels and resorts to charge for open, unattended parking. Some hotels have added this charge with no operational changes, while some have added one or more electronic key card operated gates for entry and exit.
Fees and surcharges are highly profitable; most have incremental profitability of 80% to 90% or more of the amounts collected. The estimated amounts of fees and surcharges collected are summarized below:
|
Year |
Amount (in billions) |
|
2013 |
US$2.1 (forecast) |
|
2012 |
US$2 |
|
2011 |
US$1.85 |
|
2010 |
US$1.7 |
|
2009 |
US$1.55 |
|
2008 |
US$1.75 |
|
2007 |
US$1.75 |
|
2006 |
US$1.6 |
|
2005 |
US$1.4 |
|
2004 |
US$1.2 |
|
2003 |
US$1 |
|
2002 |
US$0.55 |
|
2001 |
US$1 |
|
2000 |
US$1.2 |
These amounts 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.
Contributed by Dr. Bjorn Hanson, Ph.D. Hanson is divisional dean, clinical professor, and HVS Chair of the hospitality and tourism management program at the NYU-SCPS Preston Robert Tisch Center for Hospitality, Tourism, and Sports Management.