Skift Take
Ancillary fees are boosting airlines' profits to new highs so it's only logical that hotels would follow suit. The practice will only grow as it becomes more widespread and begrudgingly accepted by travelers.
U.S. hotels are expected to a collect a record $2.1 billion from fees and extra charges in 2013, according to new analysis by the Preston Robert Tisch Center for Hospitality, Tourism and Sports Management at New York University.
Surcharges topped out at $2 billion last year, but the addition of new fees, higher charges for existing fees, and a 2.25 percent increase in occupied hotel rooms drove the six percent increase.
Guests incur extra fees at almost every turn in hotels today. Small surcharges are tacked on for cancellations, early departures, Internet and business centers, room service, and mini-bar restocking. Large groups also get hit up for large fees for Wi-Fi and conference room set-up.
Some hotels are guilty of not being very transparent about their fees, and the FTC has been clamping down.
Hotels started adding incremental fees before airlines, but the airline industry quickly caught on, and took things to another level. Airlines now collect nearly 10 times more than hotels and bring in more than $6 billion annually.
The chart below plots the total fees and surcharges collected by the U.S. hotel industry since 2000:
| Year | Amount ($US Billions) |
|---|---|
| 2000 | 1.2 |
| 2001 | 1 |
| 2002 | 0.55 |
| 2003 | 1 |
| 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 |
| 2013 | 2.1 (forecast) |
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Photo credit: The Miami Faena Hotel. Faena Hotel