Leading Meeting Professionals

Professional Convention Management Association

August 19 2013

Hotels Poised to Break Big Record

By David McMillin

$2.1 billion.

That’s the forecast for the amount of fees and surcharges that hotels will collect in 2013, according to new research from the Preston Robert Tisch Center for Hospitality, Tourism and Sports Management at New York University. If hotels do reach that level, it will mark a new record high for fees, topping the $2 billion that hotels collected in 2012.

Fees have been rising steadily since 2009 when the hotel industry’s totals clocked in at $1.55 billion. Bjorn Hanson, Ph.D., Divisional Dean at the NYU School of Continuing and Professional Studies, says that 2013 estimates are based on an increase in hotel occupancy rates, more fees and surcharges and higher amounts charged at many properties for those add-on expenses. The prediction is another positive signal for a hotel industry that is on track for the highest national occupancy rates since 1997, according to research from PKF Hospitality Research.

SEE ALSO: 5 Key Challenges Facing Hoteliers

The New Fees You Might See Soon

Hanson highlights a new fee that has been popping up at suburban and airport hotels: a fee for open and unattended parking. Other lesser known fees that seem to be popping up on more bills include baggage holding fees when checking out before departure and charges for in-room safes.

The Question on Everyone’s Minds

While individual travelers and meeting planners alike have grown accustomed to paying additional costs for plenty of services, Internet access fees have been a particularly hot issue recently. Despite the fact that some major hotel brands are beginning to offer free Wi-Fi, Hanson believes that industry-wide complimentary access will not be in the near future.

“I do not anticipate that wireless high speed Internet access charges will be eliminated, but they may be refined,” Hanson says.

“The amount of bandwidth required to support downloading movies is requiring significant capital expenditures - typically tens of thousands of dollars and more,” Hanson adds.

In the future, Hanson predicts more tiered pricing with one level for free basic access and additional tiers for increased capacity while loyalty program members will receive access at no additional cost.

SEE ALSO: The Future of Wi-Fi Costs at Upscale Hotels

How Hotel Numbers Impact Meeting Planners

As hotels welcome more guests, the simple law of supply and demand will mean that hoteliers will have more bargaining power in contract negotiations with meeting planners. Those discounts on food and beverage costs and lower room rates for groups may be harder to find.

If you’re a planner, how will you proactively address the evolving state of hotel pricing? Will you try to negotiate earlier? Share any thoughts in the comments section below.

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