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Published: Wednesday, 5/5/2010

Hotel fee surge expected

NEW YORK TIMES
Fees to restock a minibar once the first item is removed could rise to $5.95 from the current average of $2.95, experts say. Hotels expect more guests this year and, like the airlines, plan to add fees. Fees to restock a minibar once the first item is removed could rise to $5.95 from the current average of $2.95, experts say. Hotels expect more guests this year and, like the airlines, plan to add fees.
OZIER MUHAMMAD / NYT Enlarge

The airlines have been doing it. Expect the hotels to follow suit.

During the past few years, the airlines have been adding and increasing fees on checked bags, exit-row seats, and more, much to the benefit of their bottom lines. And for similar reasons, hotels are looking at adding fees and stringently enforcing or even raising charges for cutting a stay short, for example, or for storing luggage.

A new study by Bjorn Hanson, clinical professor at the Preston Robert Tisch Center for Hospitality Tourism and Sports Management at New York University, found that although fees and surcharges collected by hotels in the United States declined to $1.55 billion in last year's faltering economy, they will rise this year.

He said he expects hotel surcharges to climb back up to $1.7 billion this year as a result of an expected rise of 3 to 4 percent in occupied hotel rooms, broader adoption of fees, and more aggressive enforcement of and increases in existing fees.

Imposed generally on a selective, property-by-property - rather than chainwide - basis, fees of $9.95 to $19.95 a day are now charged on Internet access, Mr. Hanson said.

He said fees for room service and tray charges range from $2.50 to $5.95 - added to an automatic gratuity - and he estimated minibar restocking fees at $2.95 to $5.95 a day, once the first item is removed.

In addition, he said, the fee for cutting short a stay or canceling a reservation without adequate notice is typically the cost of one night's accommodations. For storing your luggage, a hotel might charge $1 a bag or more, he said.

Fees have "become more accepted as part of the travel experience," Mr. Hanson said. With travel demand starting to rise, he added, "this gives hotels greater confidence to apply and enforce fees."

Henry Harteveldt, travel analyst for Forrester Research, was not as optimistic as Mr. Hanson about the ability of hotels to collect fees.

"While business travel is better than it has been, it's still being managed very carefully," Mr. Harteveldt said. "And business travelers' brand loyalty has declined. They're open to changing hotels if they don't feel they're getting good value."

But Michael McCormick, executive director of the National Business Travel Association, a trade group for corporate travel managers and suppliers, said that he expected hotel surcharges to climb and proliferate over the next year or so.

Mr. Hanson noted that the fees and surcharges were highly profitable for hotels, as they were for airlines. Mr. Hanson estimated the additional revenue from hotel fees and surcharges at typically 80 to 90 percent profit.



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