Fees and surcharges at U.S. hotels are expected to hit a record $2.93 billion this year, according to analysis from Bjorn Hanson, industry consultant and adjunct professor at the New York University School of Professional Studies Jonathan M. Tisch Center for Hospitality and Tourism.
U.S. Hotel Fees & Surcharges
2018 $2.93 billion (forecast)
2017 $2.7 billion
2016 $2.6 billion
2015 $2.45 billion
2014 $2.35 billion
2013 $2.1 billion
2012 $2 billion
2011 $1.85 billion
2010 $1.7 billion
2009 $1.55 billion
2008 $1.75 billion
2007 $1.75 billion
2006 $1.6 billion
2005 $1.4 billion
2004 $1.2 billion
2003 $1 billion
2002 $550 million
2001 $1 billion
2000 $1.2 billion
The forecast follows the record $2.7 billion reached in 2017, marking an 8.5 percent increase from 2017 to 2018. This year's climb is driven by a 2.5 percent year-over-year increase in occupied hotel rooms, plus additional fee and surcharge categories.
Hanson detailed the emergence of urban hotel fees in his recent report about 2019 corporate rate negotiations. These fees, he said, are similar to resort fees and are now common in major cities, averaging between $20 and $40. "The practices for disclosure are evolving, different than for most resorts charging resort fees," the report stated. "Sometimes these are shown as part of the 'total' cost of occupancy to a guest rather than as a specific extra charge. The services related to these fees and surcharges range from no new services to planned or unscheduled activities such as visits to local attractions, receptions, and printing, copying, overnight package delivery, 'complimentary' bottled water, newspapers and early or late check-out if not in conflict hotel occupancy, and others."
Urban resort fees account for the largest share of the this year's fee and surcharge increase, despite the industry's adoption of harsher cancellation penalties. In 2017, a number of hoteliers, including Marriott International, Hilton and Hyatt Hotels Corp., put in place 48-hour to 72-hour cancellation penalties. Enforcement of these penalties varies by market and hotel, Hanson said. Though U.S. hotel fees and surcharges have increased every year since 2010, recent additional fees appear to be linked to a lack of pricing power in the industry, as rate increases fail to keep pace with higher costs for hotels.
Other fees that have emerged or accelerated in recent years include charges for early check-in, most common at resorts and particularly in Las Vegas, as well as fees for unattended surface parking in suburban locations and for holding checked luggage.
Hanson expects 2019 will mark another record year for fees and surcharges, with the largest percent increase to come from service and amenities fees, i.e., urban resort fees. The report is based on discussions with lodging industry executives and corporate travel executives, analysis of industry financial data, press releases and information available on hotel and brand websites.
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