Skip to main content

Fees: A New Revenue Stream for Hotels?

Airlines are well-known for collecting fees: from changing a ticket, cancelation, baggage, selecting an exit-row seat, to carry-on luggage (by Spirit Airline only, at least for now). It seems that airlines can charge flyers almost anything they want. In 2009, the airline industry collected $7.8 billion revenue because of fees, a 42% increase from 2008. Decades ago, hotels “learned” from the airline industry about revenue management. This time, will hotels follow the airline industry again and start charging guests extra fees to boost their bottom line?

An NYU hospitality professor Bjorn Hanson expected revenues of hotel surcharges will increase from 2009’s $1.55 billion to this year’s $1.7 billion. Joseph McInerney, chief executive of AH&LA agreed to the increasing trend but estimated that such increase will not take place until 2011. Surcharge fees may vary city-to-city and property-to-property, some of the “normal” hotel fees include:

· Internet access: $9.95 to $19.95 per day.
· Room service and tray charges: $2.50 to $5.95.
· Mini bar restocking fees: $2.95 to $5.95 a day.
· Fees for cancellation or no-show: one night’s room rate.
· Luggage: $1 or more a piece.


On the other hand, some analysts disagreed with Hanson’s estimation. According to Henry Harteveldt in Forrester Research, consumers may not be able to choose their fly carriers because many airlines only fly to limited destinations. However, consumers can easily find another hotel on the next corner. Southwest Airlines set a good example for not imposing baggage fees --- it increased its market share by $1 billion a year.

Fees or no fees for hotels? What is your opinion?

References:
NYTimes.com: http://tinyurl.com/linchikwok05042010
USAToday.com: http://tinyurl.com/linchikwok05042010-2
Picture was downloaded from: http://tinyurl.com/linchikwok05042010P

Comments

  1. Which hotel fees annoy you most? Readers sound off on parking, wi-fi and other fees

    Beach cabana fee
    Room-service fee
    Internet-connection fee
    Parking fee
    Resort fee
    Telephone fees
    ...

    By USA Today (05/14/2010)

    Full discussion can be accessed via: http://content.usatoday.com/communities/hotelcheckin/post/2010/05/annoying-hotel-fees-at-sheraton-marriott-disney-hyatt-gaylord-and-other-hotels/1

    ReplyDelete
  2. MSNBC also discussed this issue on May 17th:

    http://www.msnbc.msn.com/id/37151848/ns/travel-tips/

    ReplyDelete
  3. Hostels have movies, games and books can use for their guests to enjoy at their leisure.

    Hostel Buenos Aires

    ReplyDelete

Post a Comment

Popular posts from this blog

Social media engagement is immune to COVID-19 (by Steven Valenzuela)

In the unparalleled world of COVID-19, individuals are flooded with choices: whether it be what to eat or what church service to watch. While there are marketing strategies to get consumers to purchase products to immediately increase sales, it may be a more beneficial to engage with low spending consumers in the short term, so that businesses can keep them for the long term.   Social media game strong   During this time, it is crucial to keep social media posts constant and consistently more than ever before. A recent podcast by eMarketer reports that social media outlets such as Facebook have seen a significant rise in usage. The reality is that individuals have more time on their hands, which is why it is important for businesses to utilize their free time to create content for their social media channels. In a recent interview with the hospitality net, Leland Pillsbury stated  “Customers are going to come back...And if you allow your competitors to reengage with the guests before

The 7 Ps marketing mix of home-sharing services: Insights from over one million Airbnb reviews

The 7 Ps marketing mix framework is a widely used managerial tool that helps businesses identify the principal components of a service product. The 7 P elements include Product, Promotion, Price, Place, Participant, Physical Evidence, and Process.   The 7 Ps framework can assist marketers in making decisions regarding segmentation, positioning, and differentiation. Even for the same type of products with different brands, marketers can still drive higher sales through the improvement of a product’s marketing mix.     The empirical study about 7 Ps of home-sharing services   Building upon the 7 Ps marketing mix framework, I led a research team in a big-data, supervised machine learning analysis of over 1.14 million English reviews of 37,092 Airbnb listings in San Francisco (SFO) and New York City (NYC). We aimed to discover new meaningful business intelligence through the analysis of an immense quantity of online review information that is created by consumers in the cyber marketplace

The repositioning of Ten Ren’s Tea Time (by Eddie Long)

Ten Ren’s Tea was founded in 1953 and now operates one hundred retail stores globally, providing the finest teas to their loyal customers worldwide. Ten Ren’s combines modern technology and traditional methods when processing tea leaves to provide customers with the highest quality tea that aids in improving the quality of life and health for their customers. Ten Ren’s Tea Time, the restaurant, has a total of nine locations in the Southern California area. New Image: Ten Ren’s Tea Time recently changed its logo, as shown below. We can say that the marketing team wanted a change of the company’s logo to regain customer’s attention and regain their sales.  Just like they changed their logo, they also updated the website to fit the new theme. Their website appears more modernized than their previous design s, which can attract potential customers and returning customers. The company wanted to show its target market that they know what customers want and can accommodate any customer’s