Report: U.S. Lodging Industry Fees and Surcharges Forecast to Increase to New Record in 2017

NEW YORK—According to a trend analysis report by Bjorn Hanson, clinical professor at NYU’s Jonathan M. Tisch Center for Hospitality and Tourism, the total number of fees and surcharges collected by U.S. hotels are forecast to increase this year to a record level of $2.7 billion. In 2016, fees and surcharges totaled $2.6 billion. These amounts were 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.

According to Hanson, the 2017 increase is a result of a combination of factors: a roughly 2% increase in occupied hotel rooms than in 2016; slightly more categories of fees and surcharges charged—with about the same amounts charged, but lower fees and surcharges for high speed internet access; and more fees collected for cancellations, for a total increase of approximately 5%.

While many fees have become commonplace—resort or amenity fees, early departure fees, etc.—Hanson noted an increase in new categories of fees. For instance, early check-in, which is primarily present in resorts in places like Las Vegas; charging for unattended surface parking in suburban locations; and holding checked luggage. Stricter cancellation fees are also more common, he said, with most giving until 48 hours before a stay, but some hotels increasing that to 72 hours.

Many fees and surcharges have incremental profitability of 80-90% or more of the amounts collected.