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Do You Think Hotel Fees Reasonable or Rip-off Charges?

In 2009, the airline industry collected $7.8 billion revenue because of fees. Seeing airlines’ ability of pocketing fees, I asked a question last year: Will fees become a new revenue stream for hotels? At that time, I was in doubt that hotels could do the same as what airlines did because there are way too many hotels. Customers have more options when selecting hotels than taking a flight, which makes it almost impossible for hotels to make travelers pay un-necessary fees.

Today, a student in my Hotel & Resort Operations class raised a similar question by presenting a CNN news article about hotel fees. According to the estimation, the lodging industry in the U.S. will be able to collect $1.8 billion fees this year, up 80% from a decade ago.

It happened that ABC News Network also raised a concern about hotel fees and thus provided some advice for travelers on how to save money when travelling (as shown in this embedded video). Probably because I worked in hotels before, I feel many hotel fees have always been in place even though I agree on the money-saving tips suggested in this ABC News video. For example:

  • Resort fees: many resorts charge $15 - $60 per room per day for unlimited access to the resort amenities, like swimming pools, exercise room, tennis court, etc. Guests usually cannot “get away” from these fees. If they pay a higher price, such as an all-inclusive package, they do not need to pay the resort fees.  
  • Cancelation fees: there are always some guests who fail to show up as scheduled for a variety of reasons. A hotel usually holds the rooms for guests with guaranteed reservations --- in other words, the hotel will turn down the requests from other guests. If a guest with guaranteed reservation fails to show up at mid-night but never cancels the reservation, who is going to cover the hotel’s? However, if a guest remembers to inform the hotel about the changes of his/her travel plan according to the cancelation policy, this fee can be waived.
  • Newspaper: some hotels will actually credit $1.25 or $2.00 to the room if a guest does not want to read the newspaper in the morning. Such service may vary depending on the brand and/or the location. Travelers can always ask the Front Desk to see if there is a fee for newspaper before cancelling the service. For business travelers, newspaper could be important --- so, many hotels still keep this service.  
  • Bag charges: it usually occurs in big cities, where the rent is very high, such as Manhattan and San Francisco. Even in those “expensive” locations, hotels only charge between $1 and $3.5 per check-in bag. It is important and necessary for hotels in those locations to attach a small price tag on check-in luggage because (a) the rent and labor cost of handling luggage are not cheap, (b) a small bag fee can help lower the demand of storing luggage in those busy locations so that the hotel staff can concentrate on providing good service to in-house guests, and (c) hotels are actually taking a high risk of handling guest luggage (e.g. possibly keeping a luggage for terrorists) --- no hotels will or can inspect guest luggage as TSA does.
  • Minibar fees: guests do not need to pay anything if they do not use the minibar. For more discussion about the “evolution” of hotel minibars, please check out my discussion of “what is the future of hotel minibar?” on my blog. 
  • Early departure fee: it only applies to some special events, like the Graduation Weekend in Syracuse and the Canton Fair in Canton, China. Hotels will let travelers know in advance about the early departure fee if applicable. Similar to what I discussed above about the cancelation fee, because a hotel has to turn down other requests to “guarantee” a guest’s stays, this guest will have to cover the hotel’s lost if s/he change his/her travel plan in the last minute ---as the hotel may not be able to fill the room in the last minute, which otherwise the hotel could have sold the room to other guests.  
  • Room service fee: it is provided for the convenience of hotel guests. Travelers may choose to eat in the hotel restaurants or other food outlets to save the service charges of using room service.  
  • WiFi fee: Many full service hotels still charge guests a fee for WiFi, but many limited service hotels do not. In my personal opinions, all hotels should offer free WiFi as internet access has become a must-have amenity, just like towels and a comfortable bed.  

Do you agree with me that these hotel fees are reasonable? Or do you think that hotels are actually trying to rip off guests? Please explain.

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Comments

  1. Because the lodging industry is continuously growing and the need and demand for hotels still stands high, there are various types of hotels, motels, inns and resorts that vary in price point, location, and amenities that come with your stay. Although the hotel industry is doing well, hotel companies no matter at which price point they are still find a way to charge extra to your stay through fees including resort fees, cancellation fees, perk fees such as a newspaper delivery,luggage fees, and mini bar fees. I don't think that all these fees are reasonable and believe that hotels should find better way of offering these perks without charging such high fees. Although I understand that the higher price you pay the more amenities you receive,you may not use nor need all of the amenities during your stay. Guests should be informed when they check in of all the perks and amenities available during their stay as well as group rates for different fees. I believe groups rates will help guests to be more inclined to be charged for amenities as long as the prices are not outrageously expensive. Guests feel as if they are tricked into these fees and although its business, there are ways of negotiating the best business possible among your clients. This helps to retain clients as well as get more clients in the future.

    - Alexandra Vest

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  2. As a person of service who works in the hotel industry, I was a little shocked to find that hotel still made a profit even after charging for all these little perks. And the only reason why i say this is because i know all too well how people conveniently forget to cancel their reservations and go right through corporate and have the fee waived. We lose more money this way, than by actually giving out refunds. I also agree tho that free wifi at this point in time should pretty much be a given everywhere. In this day in age, wifi is an absolute necessity and charging for it in a lodging facility is a rip-off. Lastly, I also agree that hotels should be up front about all perks and potential charges giving the consumer the options of what they want and what to spend money one to fully enjoy their stay without any added unwanted charges.

    -Kelly Hodges

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