Skift Travel News Blog

Short stories and posts about the daily news happenings around the travel industry.

Hotels

Resort Fees at U.S. Hotel Group Haven’t Grown Since 2019

1 year ago

News this week that Marriott will make resort fees more fully transparent upfront in the search results of its website and mobile app drew focus once again to the topic of resort fees. Yet research analysts at Truist suggest U.S. hotel groups haven’t expanded the practice since 2019.

“We see no clear evidence that the actual resort fees/guest have grown materially since 2019,” wrote analysts Greg Miller and Patrick Scholes in a report. “Frankly, this was very surprising to us.”

The analysts estimate that resort fees remain “a modest” amount of total revenues, between 1 and 2 percent, based on data from HotStats, a benchmarking service.

A chart from Truist Securites' April 25 "April Hotel P&L Analyzer" report. Source: Truist.
A chart from Truist Securites’ April 25 “April Hotel P&L Analyzer” report. Source: Truist. CLICK TO ENLARGE

One possible reason may be that resort fees may have become “less profitable than pre-pandemic given inflationary and labor cost pressures,” the analysts speculated.

Marriott is the first of the global hotel groups to boost pricing transparency. It alone made at least $206 million off the practice just from its self-managed resorts since 2012, according to depositions from the Washington, D.C., Attorney General’s ongoing lawsuit, which Skift reported on. But all of the major hotel groups engage in the practice.

So-called “drip pricing” continues to be a popular sales technique in travel, where a seller gets a consumer psychologically invested in an offering and then adds little additional costs without prompting the buyer to abandon the purchase.

Yet many consumers seem to take it in stride. One study found that guests dropped their online ratings by only a small percentage after they encountered fee surprises yet booked anyway.

Gary Leff's One Mile at a Time blog was the first to report on Marriott's changed policy.

Business Travel

Tripbam Doesn’t See Recession Signs in Business Travel Data Yet

2 years ago

The research arm of investment bank Truist reported on a conference call it held with corporate travel data company Tripbam. Takeaways included that any indications of a recession have not yet shown up in business travel bookings and pricing data.

Tripbam believes 15 percent of business travel may never fully recover but that is better than the 20% they had forecast back in January.

Global booking volumes as of mid-September have been stagnant the past several months and are running down 15 percent versus comparable 2019 levels and closer to down 25 percent for the US. Room rates are tracking up 5 percent from 2019 levels.

Looking forward to 2023, Tripbam thinks corporate rate negotiations could wind up with a 5 percent to 8 percent year-over-year increase.

Finally they think the technology sector remains a substantial drag on the overall pace of recovery, especially in the US and even more specifically for the San Francisco hotel market.

This summary appeared today in Daily Lodging Report, which offers essential industry news for hospitality and lodging executives. Subscribe here.