U.S. hotels collected a record $2.1 billion in total fees and surcharges last year -- and they're on track to set another record this year, according to an analysis published this week by New York University's (NYU) School of Professional Studies.
The analysis, conducted by Dr. Bjorn Hanson, divisional dean of the Preston Robert Tisch Center for Hospitality, Tourism, and Sports Management, forecasts a new record of $2.25 billion in fees and surcharges for U.S. hotels in 2014, up 87.5 percent from $1.2 billion 10 years ago, in 2004.
"The increase for 2014 reflects a combination of approximately 3.5 percent more occupied hotel rooms than in 2013, more fees and surcharges, and higher amounts charged at many hotels for a total increase of approximately 6.0 percent," reads Hanson's analysis.
According to Hanson, fees and surcharges -- which have incremental profitability of 80 to 90 percent or more -- emerged as a lodging industry practice in 1997. Since then, he points out, they have increased every year except for periods following 2001 and 2008, when lodging demand declined due to the Sept. 11 terrorist attacks and the Great Recession, respectively.
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, room service delivery surcharges, mini-bar restocking fees, charges for in-room safes, and automatic gratuities.
For groups, increasingly common fees and surcharges include those charged for bartenders and other event staff; fees for master folio billing; and baggage holding fees for guests leaving luggage with bell staff after checking out.
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