How much is that room, really?

Jun 17, 2018 - 3:00 PM

"How much?” is a question any traveler reasonably asks, whether the item being purchased is a GV, a Berber rug in Marrakech, or, in an example I encountered not long ago, a bottle of spring water in my room at a resort.

The water was “complimentary,” and not only that, the bottle itself was “refillable,” a placard informed me. Whoa, I thought, what a concept. Free water in a plastic bottle that doesn’t leak!

OK, so how much, really? Well, usually you get what you pay for, but it turns out I was paying a sneaky surcharge of the sort that is being added to hotel room rates in an increasing number of U.S. cities. In this case, my $35-a-night “resort fee” was for “amenities,” including the bottled water, an in-room safe, and a fitness center (none of which I used). I also paid a “housekeeping” surcharge and a “groundskeeping” fee that presumably covered the cost of mowing the grass and watering the pretty flowers.

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Surcharges like these are now expanding from resorts to urban hotels in cities like New York. Travel blogger Gary Leff, for example, recently marveled that the 2,000-room Hilton Midtown hotel, where rooms start at about $325 a night, added an “urban destination fee” to his bill. “The hotel quotes you one price but actually charges another,” he griped.

I’m not cheap, and I presume you aren’t, either. But most of us do like to know up front how much things actually cost. For high-end business travelers, the issue is only just emerging, but there are stirrings of dissent—not because someone who arrives via private jet can’t afford an extra 50 bucks, but because it’s simply annoying when a charge is not readily apparent till the bill arrives. “I do hear people complain anecdotally when a hidden fee is in place at a particular hotel,” says Dan Hubbard, a spokesman for the National Business Aviation Association.

The surcharges are usually disclosed in one way or another, but they’re typically not listed in the advertised room rates, leading some critics to refer to them as “hidden fees.” The American Hotel and Lodging Association says hotels practice “full disclosure” of mandatory fees and adds, “If consumers were charged individual fees for all amenities, the cost would likely be prohibitive.”

Sometimes, added fees include a credit for bars or restaurants in the hotel. This reflects still another trend in the industry: a concerted effort to keep guests on the property for dining and drinking, adding to a financial metric hotels consider even more important than room rate: REVPAR, or revenue per available room.

Part of the impetus for hotels to add surcharges may be the example set by the airline industry in the last decade or so. Worldwide, airlines pocketed $57 billion in so-called ancillary fees last year, three times what they reported in 2010, according to IdeaWorks Co., which tracks that data. So far, the trend toward hotels adding fees onto the room rate is mostly confined to the U.S., where surcharges totaled a record $2.7 billion last year, according to industry researcher Bjorn Hanson at New York University’s Jonathan M. Tisch Center for Hospitality and Tourism.

It’s obvious to any traveler that all hotels in the U.S.—and especially the mid-level-to-luxury segment—are striving to provide better experiences for guests, from high-quality bedding and new bathrooms to redesigned lobbies and state-of-the-art technology. Last year, U.S. hotels spent $6.85 billion on such improvements, says Hanson. This intensely competitive industry is looking for new ways to boost revenue—even as STR, the hospitality business data firm, says that in 2017 the three key measures of hotel performance (average REVPAR, room rate, and occupancy) were all the highest it has ever recorded.

That’s understandable, and the spread of surcharges may be inevitable. Moreover, a few extra dollars added to a room that costs $400 a night is no big deal. But transparency still counts for something.

“It’s a matter of honesty, not money,” insists Lauren Wolfe, a lawyer and world traveler. She started an advocacy site (killresortfees.com) to track the spread of resort fees into the wider hotel world after booking a room in Key West for $400 a night but finding at check-in that there was a $20-a-night surcharge.

“I would have been happy to pay $420, but I am not happy to be told the room is $400 when it actually is $420,” she says.