U.S. Lodging Industry Fees and Surcharges Forecast to Increase to a New Record Level in 2014–$2.25 Billion

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Trend Analysis Report
August 25, 2014

By Bjorn Hanson, Ph.D., Clinical Professor
NYU School of Professional Studies Preston Robert Tisch Center for
Hospitality, Tourism, and Sports Management

Following the 2013 record of $2.1 billion, total fees and surcharges collected by U.S. hotels will increase to another record level of $2.25 billion in 2014. 

The increase for 2014 reflects a combination of approximately 3.5 percent more occupied hotel rooms than in 2013, more fees and surcharges, and higher amounts charged at many hotels for a total increase of approximately 6.0 percent.

Fees and surcharges emerged as a common industry practice in 1997.  Another phase for fees and surcharges was when energy surcharges were introduced in 2000. 

Examples of fees and surcharges include: resort or amenity fees, early departure fees, early reservation cancellation fees, internet fees, telephone call surcharges, business center fees (including charges for receiving faxes and sending/receiving overnight packages), room service delivery surcharges, mini-bar restocking fees, charges for in-room safes, automatic gratuities and surcharges, and baggage holding fees for guests leaving luggage with bell staff after checking out of a hotel but before departure, and charges for unattended parking. For groups there have been increased charges for bartenders and other staff at events, special charges for set-up and breakdown of meeting rooms, and fees for master folio billing.

U.S. lodging industry fees and surcharges have increased every year except for brief periods following 2001 and 2008 when lodging demand declined.

Fees and surcharges are highly profitable; most have incremental profitability of 80 to 90 percent or more of the amounts collected.

The estimated amounts of fees and surcharges collected are summarized below:

Year

Amount (in billions)

2014

$2.25 (forecast)

2013

  2.1

2012

  2.0

2011

  1.85

2010

  1.7

2009

  1.55

2008

  1.75

2007

  1.75

2006

  1.6

2005

  1.4

2004

  1.2

2003

  1.0

2002

  0.55

2001

  1.0

2000

  1.2

These amounts are estimated based on selected interviews with industry executives and corporate travel executives, analysis of industry financial data, press releases, and information available on hotel and brand websites.

EDITORS: To interview Dr. Bjorn Hanson about this research or for more information, please contact Cheryl Feliciano at Cheryl.Feliciano@nyu.edu or 212-992-9103 or Suzanne Dawson at sdawson@lakpr.com or 212-329-1420.

About the Author
Bjorn Hanson, Ph.D., is clinical professor with the NYU School of Professional Studies Preston Robert Tisch Center for Hospitality, Tourism, and Sports Management. He is a hospitality and travel researcher, widely respected for his industry forecasts and for having created econometric models that transformed business analysis in the field. Prior to joining NYU, he held the position of global industry leader, hospitality and leisure, at PricewaterhouseCoopers LLP.

About the NYU School of Professional Studies
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