Profits on fees can easily exceed 90%
Hotels will charge customers a record-breaking $2.25 billion in fees and surcharges in 2014, according to a new study that reveals the big business of little expenses.
The study, released Monday by New York University professor Bjorn Hanson, attributed this year’s record forecast to slightly higher occupancy rates, higher amounts charged for services and an ever-expanding list of chargeable services, from early departure fees to automatic gratuities to mini-bar restocking fees.
The study estimates that hotels can make a profit of roughly 80%-90% on fees and surcharges, and that the amount collected has steadily climbed since charging fees became a widely embraced industry practice in the late 1990s. In 2000, hotels were collecting $1.2 billion in fees and surcharges. By 2013, the amount had nearly doubled to $2.1 billion.