Meeting Mentor Magazine

February 2023

Get Ready for More Fees, Surcharges and Mandatory Gratuities Hotel

Hotel room rates are rising. Airfare is sky high. Food and beverage costs are soaring. Even flower arrangements are getting outrageously expensive — if you can even source them. One more expense is on the rise as well, so be forewarned: Don’t expect to get a break on fees, surcharges and mandatory gratuities any time soon.

Can meeting and event professionals perhaps take hope for some relief from the incessant drip of fees, surcharges and other often surprise expenses from the recent announcement that the Federal Trade Commission is considering a rule addressing resort fees and other hidden charges? After all, President Biden even weighed in not long ago. In a speech announcing his administration’s new focus on fighting “junk fees” in consumer industries including hotels and airlines, he said, “When you think you’re paying one price to book a hotel, you only find out after checking out that there’s a ‘resort fee’ you never heard about that’s added to your bill.” Planners know all too well how that goes over with their attendees as they check out after an otherwise amazing event.

Airlines are even more notorious for hidden fees than hotels. The U.S. Department of Transportation does already have in place its Guidance Regarding Interpretation of Unfair and Deceptive Practices, which is designed to provide an “interpretation of the terms unfair, deceptive, and practices as it relates to its statutory authority to prohibit unfair or deceptive practices. The Department is taking this action to better define the terms unfair and deceptive in response to an Executive order issued by President Biden on July 9, 2021, on promoting competition in the American economy.”

And yet meeting and event planners continue to complain about the ever-increasing volume of fees and surcharges they’re seeing crop up now, not just in hotels and airlines, but also in everything from AV and production companies to ground transport.

“Fees are all over the place right now: Restaurants charge not only tax and gratuities (without stating how much it is), but also a 4% main dining room service fee or a 5% administrative fee,” says meeting and incentive veteran Iris Langanke, DMCP, CITP, CIS, DES,  CEO of Liberty International USA at Liberty International Tourism Group, a destination management company. Transportation companies are now adding 20% mandatory gratuities on top of a per-person, per-day mandatory tip for the guide, airport surcharges, tolls, garage fees and credit card fees on top of fuel surcharges, planners report.

But Shouldn’t the Fees Go Away When the Need for Them Disappears?

Unfortunately, there’s no reason to think resort fees will go away on their own — why would they, when they remained in place even during the pandemic when none of the amenities a resort fee is supposed to cover were even available? Some hotels are adding in service and administration fees, sustainability fees, late-and early-checkout fees as well, in addition to fuel surcharges in the 8%-12% range.

But surely fuel surcharges will all go away once prices drop, right? Probably not. Remember those fuel surcharges hotels, airlines and other travel-related companies slapped on in the late 1990s when energy prices went up dramatically? They never did go away when oil and gases prices dropped, and there’s not much reason to think anything has changed on that front, either.

Also not budging are COVID-related health and safety charges, which often are still in effect even as restrictions have eased around the country. Planners also report being charged “mandatory gratuities” for hotel housekeeping staff, even as housekeeping services have been reduced at many hotels. There also is a continuing trend of non-resort hotels tacking on “urban fees” or “facility fees” to cover perks like using the hotel internet or gym, whether your attendees actually use those perks or not.

Why are these fees and surcharges so popular, and so intractable? According to Bjorn Hanson, adjunct professor at New York University School of Professional Studies and a hospitality expert who has been tracking hotel fees for years, “Fees and surcharges are highly profitable.” In his last report on the topic, published pre-pandemic, he said that up to 90% of many charges go straight to the bottom line.

While the fees themselves are seldom greeted with glee by planners, the really galling part, they say, is when these fees and surcharges are tacked on after the fact with no forewarning, or are referred to with vague language in the contract, such as “estimate charge.” This takes up valuable time when planners have to go back to their suppliers to clarify what that estimated charge might mean, and it makes it hard to get a firm grip on what exactly the end costs will end up being. “Clients don’t like this,” says Langanke. “Especially international clients. They don’t understand all the additional charges and find them suspicious, maybe even a rip off. That doesn’t look good on us, although we are just the messenger.”

So how can you get around this seemingly intractable and definitely frustrating issue? Some fees, such as resort fees and gratuities, can and should be negotiated up front, and all fees and surcharges should be disclosed prior to closing the deal. Planners also should be sure to include a clause stating that no additional fees will be added unless disclosed and mutually agreed to.

And some relief may be coming. Some major hotel chains have been responding to lawsuits spurred by advocacy group Travelers United with promises to be more transparent. Marriott International recently said it was instituting new transparency rules around pricing, including disclosing all fees up front when customers book their hotels. Stay tuned.

 

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About ConferenceDirect
ConferenceDirect is a global meetings solutions company offering site selection/contract negotiation, conference management, housing & registration services, mobile app technology and strategic meetings management solutions. It provides expertise to 4,400+ associations, corporations, and sporting authorities through our 400+ global associates. www.conferencedirect.com

About MeetingMentor
MeetingMentor, is a business journal for senior meeting planners that is distributed in print and digital editions to the clients, prospects, and associates of ConferenceDirect, which handles over 13,000 worldwide meetings, conventions, and incentives annually. www.meetingmentormag.com

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