U.S. hotels are expected to collect 4 percent more fees and surcharges this year, according to a trend analysis report from New York University professor Bjorn Hanson. Following a record collection of $2.45 billion in 2015, U.S. properties are forecasted to collect $2.55 billion by the end of this year. Although the total will break previous records, the percent increase will be the lowest since 2009.
The increase for 2016 reflects a combination of approximately 2 percent more occupied hotel rooms than in 2015, more categories of fees and surcharges, and higher amounts charged, but lower fees and surcharges for high-speed internet access.
U.S. hotel industry fees and surcharges have increased every year except for brief periods in 2001 and 2008 when hotel demand declined. Fees and surcharges are highly profitable; many have incremental profitability of 80 to 90 percent (or more) of the amounts collected.
Disclosure of such fees has become increasingly more visible in recent years, following a series of warnings from the Federal Trade Commission to the hotel industry in 2012, as well as Missouri Senator Claire McCaskill’s introduction of legislation targeting what she refers to as “deceptive hotel fees.”
