Hoteliers Test 'Elasticity' of Fees on Amenities - CoStar

Excerpt from CoStar

Hoteliers said resort or amenity fees likely aren't going away, as they are a profitable revenue stream. However, they agree the industry as a whole could do better with fee transparency throughout a guest's booking journey.

Hoteliers don't plan on eliminating ancillary fees anytime soon, but they say that better communication on the value behind such fees can avoid guest disputes and dissatisfaction.

Resort fees first began at true resorts, said Crown Hospitality Consulting Managing Principal Amanda Chivers during a panel at the recent Hotel Data Conference. But once non-resort hotels caught wind that profits from fees went straight to the bottom line, more wanted in.

However, guests and government officials have recently begun pushing back.

In February, U.S. President Joe Biden said a bill has been written to stop resort fees, through the "Junk Fee Prevention Act."

"We'll ban surprise 'resort fees' that hotels tack on to your bill. These fees can cost you up to $90 a night at hotels that aren't even resorts," he said during a February State of the Union speech.

These fees are typically associated with parking, gym access, pools, pets, room cancellations, room service and cleaning.

Asked if consumers are justified in feeling taken advantage of by fees, Jenna Fishel, senior vice president of commercial strategies at First Hospitality, said "it's in the eyes of the beholder."

"If they feel we have not been very transparent or they don't understand the value, then it's up to them and their perspective to feel that way," she added.

Gopu Menon, executive vice president of distribution at Highgate, said these fees have been around for years.

Transparency on fees is the key to successfully implementing them, the panelists said.

Jason Pirock, head of marketing at Springboard Hospitality, said a guest's journey should be evaluated on how strong the communication is from start to finish.

"That's where a lot of issues have come in the past or where the complaints come from, is that they're ultimately finding it out in the end. The more that we can [make it transparent to them] on the website, in the booking engine, in your transnational emails," he said. "If you set those expectations up front ... I'm not going to say they're going to be happy at the end of the day, but at least they're knowing what they're getting into."

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