It's not your imagination: Hotel fees and surcharges really are multiplying like bunnies in springtime. As of the end of July, PricewaterhouseCoopers (www.pwcglobal.com) had identified 15 areas in which hotels are instituting fees or raising prices for the first time and, according to Bjorn Hanson, a lodging consultant for the research firm, every month the list grows longer. . The dollar amount is adding up as well: of the $23 billion in profits hotel companies have generated over the past two years, more than $1 billion resulted from fees, charges, and price increases for services.
"It started with mandatory gratuities for groups, and the percentages for those have increased. Now there are fees for just about anything," says Mark McCulley, president of Mark of Excellence Meetings and Events, a full-service planning firm serving the association market in Los Angeles.
Particularly egregious, say planners polled for this article, are fees for things like: baggage handling (whether used or not); daily in-room safe fees (again, whether used or not); bottled water on the nightstand that looks like an amenity but will show up on the bill at $4; and pool service/towel fees charged to groups with no spare time to use the pool. "What’s next," says one outraged planner on the Meeting Industry Mall listserve (www.mim.com), "pay per flush?"
Just Say When…
Hotel occupancies have been declining since 1996, yet many hotels are stilling turning a profit. "Since they can’t raise the contracted room rate, the fees serve as a kind of pseudo rate increase," Hanson says.
Growing awareness of—and umbrage about—these fees began with the energy surcharges which first popped up in California this spring to help offset that state’s voracious energy costs, then spread across the country. "Prior to the arrival of the energy surcharges on the West coast, I hadn’t really focused on the problem," says Stephen Alter, meetings manager, American Symphony Orchestra League, New York City.
Energy surcharge lawsuits soon followed, with class-action suits being filed in San Francisco and Los Angeles against Hilton, Hyatt, Marriott, and Starwood in May. In June, the Florida Attorney General’s office launched an investigation into the practice at Florida hotels’ on surcharges. Several weeks later, a class-action lawsuit against the Wyndham International chain was filed in Miami. "I think the door will open to broader suits as well," says Hanson.
Alter says he was able to get energy surcharges dropped at his annual event in Seattle. "Now I hear attendees complain about the unexpected charges that accompany their hotel bills, be it the $3 energy surcharge, the outrageous package/message delivery charges, or even the pool and health club fees which, until recently in most hotels, have been free to guests," says Alter. He has begun to include a "hidden charges" clause in all his organization’s contracts to make sure fees and charges are disclosed up front and, if possible, negotiated away.
The Hotel Perspective
Roger Conner, vice president of communications with Marriott International, Washington, D.C., wouldn’t comment specifically on the proliferation of fees and charges for services because, he says, "I don’t have an official overview on [fees and charges] within Marriott. I’m sure some of our properties must have something along those lines, but I don’t have specific knowledge of it."
Hanson says that’s pretty typical. "None of the hotel chains have uniformly endorsed or implemented those fees, so you can’t say Hyatt has charges for this, Marriott doesn’t. Some Hyatts do, and some Marriotts do." He cautions that, even if you’ve negotiated a contract on a national level, the local hotel still may have fees the national sales rep wasn’t aware of.
According to Kathy Shepard, vice president, corporate communications with Hilton Hotels Corp. in Beverly Hills, Calif., Hilton’s corporate hotels don’t impose any fees without disclosing them first. "We have a sign on the in-room safe that explains that there is a charge for using it, and another on the coffee pot saying that the coffee is provided for their enjoyment at no charge," she says. While she couldn’t speak for Hilton’s franchise hotels, she says the worst you can expect at a corporate Hilton will be spa fees and "those outrageous phone bills." But the spa fee is stated up front, and "everyone uses their cell phones these days instead of the hotel phone anyway, don’t they?"
Cover Yourself in the Contract
To protect your attendees from unpleasant fee surprises, planners should ask about any extra fees in advance and state in the contract that any fees not listed in the contract will not be paid, says Jed Mandel, a partner in the Chicago–based law firm of Neal, Gerber & Eisenberg. If the contract has already been signed, confront the hotel about the fees, going up the ranks if need be, or even file a lawsuit.
"Planners need to make sure all fees are disclosed ahead of time, and that the hotel has the authority to impose the charge," Mandel says, adding that you should not to accept any fee-related language for meetings several years out. "If hotels experience enough pushback, you’ll start to see them put in a provision that says the meeting planner will have to agree to whatever surcharges exist at the time of their meeting. Don’t do it," he says. "Put it in the contract that the decision will be made closer to the date, just like you’d do for room rates."—Sue Pelletier