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Hotel fee surcharges to touch $2 billion in U.S. as room rates rise

Excerpt from SCPS

Aug 16, 2012 12:30 pm

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The hotel industry started surcharges trend, airlines took it to its illogical extreme. We’re happier customers of the hospitality laggards.

— Rafat Ali

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Following the record $1.85 billion collected in 2011, total fees and surcharges collected by U.S. hotels will total a new record of $1.95 billion this year, a combination of 3.5 percent higher occupancy, plus higher fees and surcharge amounts at many hotels, especially resorts, according to a new study by Preston Robert Tisch Center at NYU.

There were no reported new fees and surcharge categories introduced in 2011. Most fees and surcharges are highly profitable; most have incremental profitability of 80 to 90 percent or more. Although the lodging industry initiated fees and surcharges before the airline industry, the airline industry collects significantly more than the lodging industry.

The estimated amounts and trend of fees and surcharges collected is summarized below:

Year

Amount (in billions)

2000

$1.2

2001

  1.0

2002

  0.55

2003

  1.0

2004

  1.2

2005

  1.4

2006

  1.6

2007

  1.75

2008

  1.75

2009

  1.55

2010

  1.7

2011

  1.85

2012

  1.95 (forecast)

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