Following the record US$1.85 billion amount collected in 2011, total fees and surcharges collected by U.S. hotels are increasing again in 2012, forecast to total a new record of US$1.95 billion, according to a new report from the Preston Robert Tisch Center for Hospitality, Tourism, and Sports Management at New York University.
The increase reflects a combination of 3.5% more occupied hotel rooms than in 2011, plus higher fees and surcharge amounts at many hotels, especially resorts. Fewer hotels will have newly introduced fees and surcharges.
There were no reported new fees and surcharge categories introduced in 2011, so the increase is primarily attributed to increases in the amounts charged, the introduction of fees and surcharges for some hotels, and an increase in the number of occupied rooms of almost 5%.
Fees and surcharges emerged as an industry practice in about 1997 with resort fees (one of the first resort fees was titled, “amenities tariff”). Energy surcharges were introduced for a short period in 2000. Fees and surcharges have increased every year except for periods following 2001 and 2008 when lodging demand declined. Although the lodging industry initiated fees and surcharges before the airline industry, the airline industry collects significantly more than the lodging industry.
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.
Most fees and surcharges are highly profitable; most have incremental profitability of 80% to 90% or more.
The estimated amounts and trend of fees and surcharges collected is summarized below:
|
Year |
Amount (in billions) |
|
2000 |
US$1.2 |
|
2001 |
US$1.0 |
|
2002 |
US$0.55 |
|
2003 |
US$1.0 |
|
2004 |
US$1.2 |
|
2005 |
US$1.4 |
|
2006 |
US$1.6 |
|
2007 |
US$1.75 |
|
2008 |
US$0.75 |
|
2009 |
US$1.55 |
|
2010 |
US$1.7 |
|
2011 |
US$1.85 |
|
2012 |
US$1.95 (forecast) |
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.