Report: U.S. Hotels To Take In $2.25 Billion In Ancillary Fees In 2014 & How To Avoid Them

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Photo by Kevin Dooley.
Photo by Kevin Dooley.

U.S. Hotel Ancillary Fees On The Rise

A new report by Bjorn Hanson who is a Professor at the NYU School of Professional Studies Preston Robert Tisch Center for Hospitality, Tourism, and Sports Management, states that hotels in the U.S. will take in $2.25 billion in ancillary fees in 2014, a 6% increase over 2013.

This increase comes as a result of 3.5% higher hotel occupancy across the country combined with higher fees being charged at more properties. Among the fees calculated in the study are: resort or amenity fees, early departure fees, early reservation cancellation fees, internet fees, telephone call surcharges, business center fees (including charges for receiving faxes and sending/receiving overnight packages), room service delivery surcharges, mini-bar restocking fees, charges for in-room safes, automatic gratuities and surcharges, and baggage holding fees for guests leaving luggage with bell staff after checking out of a hotel but before departure, and charges for unattended parking. In other words, a lot of fees.

These fees are highly profitable for hotel companies.  According to Hanson, most of the fees have an 80-90% profitability level which explains why we are seeing so many of them popping up all over the place. While the fees only amount to 2% of total hotel revenues, they account for a significant percentage of overall profits.

The report also graphs estimated industry wide fees collected every year between 2000-2014. The amount collected has basically doubled over that period of time, with only 2001 & 2009 showing year to year decreases due to economic conditions.

Photo by Joseph de Palma.
Photo by Joseph de Palma.

A Local Las Vegas Angle

I found this study when reading an article in the Las Vegas Review Journal. Las Vegas is the largest hotel market in the United States and has thus driven many trends across the industry. While resort fees became common here many years ago, lately hotels in Las Vegas have started charging a number of new ancillary fees. (Read the article to see just how ridiculous it is getting!)

The airline and car rental industries really started the trend of charging a slew of different fees and the hotel industry took notice. Over my travels during the past year I have seen an increase in service fees, early check-in fees and a number of others as well. With hotel occupancy up and the economy improving, I am sure there will be no slow down in this trend.

How To Avoid The Fees

Avoid hotel fees
Photo by David Neubert.

One of the best ways to avoid fees is by getting elite status. (Almost every program will give you some level of elite status by holding their co-branded credit card.) Even though early check-in isn’t usually a published benefit of most loyalty programs, I have yet to be charged to arrive early. Generally if a room is available then they give it to me. Additionally fees like late check-out and internet fees are generally waived for elite members. I have also had mixed success with getting resort fees waived at select hotels.

It is also important to be informed. If a hotel is going to charge you a fee, then calculate that into your total nightly room cost. Here in Las Vegas some hotels run as low as $15 per night midweek. These same hotels often have resort fees of $20-$25. When I am deciding where to stay, I add the two together to calculate my nightly cost. I also check hotel websites for any other fees and calculate parking if needed into my final tally as well.

You can sometimes also get fees waived by asking. If a hotel isn’t expecting to be full during your visit, they may waive fees in order to gain your business. Don’t expect this to work at large properties like the ones in Vegas, but I have had quite a lot of success with asking at smaller properties. A couple of weeks ago in Colombia a hotel wanted to charge me a $30 per night fee for my son to stay in our two room suite with two king size beds. (Large enough for at least four people.) I simply informed them that the Hilton a few blocks away wouldn’t charge us and the fee was waived immediately.

Conclusion

As someone who travels often and loves the industry, I find the report very interesting. It is definitely worth a quick read. I also found that a number of newspapers around the country have published articles about the report with quotes & more information from Dr. Hanson. Like I mentioned before, the Las Vegas focused article is interesting, however there are a number of others as well. Searching Google News should help you find them.

Let me know below what you think about ancillary fees? What kind of crazy fees have you seen during your travels? Have you ever been stuck paying one?


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