While energy costs skyrocket, hotel guest rooms are filled with TVs blaring, laptops tapping, and air conditioners humming. In fact, some hotels are experiencing up to an 80 percent increase in energy costs, according to Kathy Shepard, vice president, corporate communications with Hilton Hotels Corp. in Beverly Hills, Calif.
It hurts so much that, at press time, major chains, including Hilton, Starwood, Marriott, Hyatt, and Wyndham, had added surcharges to help them cope with what everyone hopes will be a temporary surge in energy costs. While Marriott only had energy surcharges in place in its California properties at press time, “We anticipate some additional surcharges in other markets this summer,” says Roger Conner, vice president, communications, Marriott International in Washington, D.C.
Hilton instituted a surcharge in March at its owned and managed properties in California; within a month it had expanded the policy to include several other markets around the country on an as-needed basis. “We hope it won't get worse as the summer goes on, but you never know,” says Shepard.
Lynne Tiras, CMP, president of independent meeting planning firm International Meeting Managers Inc., Houston, is outraged. “This surcharge is an insult to the intelligence of most meeting professionals and others in the industry,” she declares. “While we know that every hotel deserves to make money, they are pushing the limits by nickel-and-diming clients.”
Not all hoteliers are jumping on the bandwagon. Scott DeBerg, senior sales manager with Abbey Group Resorts in Lake Geneva, Wis., says, “Our resorts are basically eating the much higher energy costs. We do not have surcharges in place, and, according to our vice president of Wisconsin Properties, we are not planning to institute any. I personally agree with the perception of meeting planners that rising energy costs are a part of doing business.”
Conner insists that there's nothing hotels dislike more than having to add any extra charge. “We're not anxious to institute anything that involves nickel-and-diming the customer. What we're saying is that our energy costs are spiraling upward, and we're being very honest and fair in identifying what the surcharge is. As soon as the need for it is gone, the surcharge will be gone.” Echoing his sentiments, Hyatt Hotels of California released a statement this spring that says: “In order to offset the unprecedented increase in regional energy costs, guests are currently being charged $2.50 per room, per night. This is a temporary necessity and the surcharge will be lifted as soon as the energy situation is resolved.” While many meeting planners say it should just be factored into room rates, Shepard explains, “We didn't want to raise our room rates, because then it gets locked into the system. This is a temporary situation, and the surcharge is something we can remove easily.”
Short-Circuit the Charge
In the meantime, what can meeting executives do? Tiras fought the surcharge — and won. “We had a call from a hotel in the Northwest, where we are taking a repeat meeting this summer. The salesperson told us that they would be adding a $2.50 energy surcharge to our rooms. We informed them that it was not in ourand that we would be advising our attendees in advance of the meeting not to pay it.”
James Goldberg, a partner with Goldberg & Associates PLLC, Washington, D.C., would say that's just fine. “I put energy surcharges in the same category as resort fees and coffee fees,” he says. “Any fee that is mandatory in nature and applied post-contract amounts to an increase in room rate and, in my opinion and from a legal standpoint, that amounts to a breach of contract.” He advises meeting planners to talk with someone in a decision-making position, such as a director of sales or general manager, and tell them you won't pay it.
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