Energy Fee Redux?

In recent settlement agreements with Florida's Attorney General, both Marriott and Starwood agreed not to assess energy surcharges in the state for two years, or to draw up any group contracts that include such fees, even for meetings to be held after the two-year period.

But will the result of the investigations — in which the state claimed the chains were levying the fees without disclosing them — prevent hotels elsewhere from breaking out energy costs as separate line items on bills?

"There's no doubt that some will try," said Bjorn Hanson, global hospitality industry leader at consulting firm PricewaterhouseCoopers, noting that hotels may justify it to guests by saying, "You've never paid $3 at the pump before, right?"

It's the specter of rising fuel costs, which led to a rash of energy surcharges a couple years back, that has caused industry observers to speculate that hotel companies will re-implement the pricing strategy.

Hanson said some people have told him that individual hotels already have assessed energy surcharges of $2.95 to $5.95, though he was unable to corroborate those reports.

The Silverado Resort, in Napa, Calif., was said to be charging energy fees as of last month; property officials did not return calls.

Josh Grimes, a travel industry attorney in Philadelphia, said the return of energy fees "is inevitable, because every other industry is charging them. My air conditioning repair guy said he will be tacking on an energy charge, and the airlines have already done so."

Added Washington-based attorney Jim Goldberg, "I would not be surprised to find energy fees in hotel contracts next year. I heard that home energy costs will rise by 70 percent in 2006, so commercial energy costs likely will go up too."

Expectations among meeting planners were mixed.

"I certainly expect those to pop up again," said Heather Kreider, event coordinator at TQ3Navigant in Englewood, Colo.

But independent planner Vicky Betzig of Meetings Industry Consulting in Brookfield, Wis. does not expect hoteliers to add the fee, because high fuel costs are a limited-time issue, she said.

"I have not heard of any facilities adding energy fees due to recent events with oil prices," she said. "I look at the high costs of energy as being temporary, and as a planner mostly of association meetings, I typically am booking properties several years in advance."

Marriott declined comment on the settlement of the Florida investigations. Starwood, which includes such chains as Westin, Sheraton and W hotels, was a bit scorched by the experience.

"My guess is that we will not do energy fees again," said David Scypinski, senior vice president of industry relations. "We learned something the last time and aren't going to be quick to do them."

Said a Hilton spokeswoman, noting the company was previously sued regarding a failure to disclose the fee, "Never say never, but there are no plans at this point."

If hotels do make some accounting of their higher energy costs, Kreider and Betzig both indicated they'd prefer a higher room rate rather than pay an energy fee. But that approach would increase the amount subject to occupancy tax.