Hotels Embracing Airline Fees Example
The biggest challenge to cheap travel, whether it is cheap airplane tickets or cheap vacation packages, is avoiding the fees that airlines are now charging their passengers. Given the success (measured by almost $8 billion collected last year) airlines have had charging their passengers fees, hotels appear to be gaining confidence in applying and enforcing fees of their own.
Total fees and surcharges collected by U.S. hotels decline to $1.55 billion last year. Such fees are expected to rise to $1.7 billion in 2010 as a result of a number of factors:
Hotel room occupancy projected to increase by 3 to 4 percent due to improving economy
Broader adoption of hotel fees
More serious enforcement of and increases in existing fees
Hotel fees and surcharges started showing up at high end hotels in the late 1990s for the right to use to resort amenities such as the pool, putting greens and tennis courts. Currently fees are generally charged on a by-location basis rather than chain wide.
Hotel fees currently being charged include for services such as:
Internet access, whose daily rate generally ranges from $9.95 to $19.95.
Room service, tends to range from $2.50 to $5.95, not including tips.
Minibar restocking fees, varying from $2.95 to $5.95 daily, plus the cost of the food consumed.
Fee for leaving early or canceling a reservation without adequate notice usually runs the cost of one nights stay.
Parking fees can run between $20 to $30, or even higher, per day.
Storing luggage, costs $1 and up per bag.
Hotels, even more so that airlines, feel that they have a very limited ability to increase their average daily rate, but they can improve their bottom line by charging more add on fees, over 90 percent of which are often pure profit.
Currently the lower priced, budget hotels, are the ones more likely to be offering free internet service as well, in many cases, as free breakfasts.
Travelers can avoid some fees, particularly internet access fees, by either participating in a hotels loyalty program or by earning elite status in those programs.
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