Hoteliers: Stop Nickel and Diming Us!

Hoteliers: Stop Nickel and Diming Us!

by Robert McGarvey

 

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The report out of NYU’s Tisch Center for Hospitality and Tourism is a 2×4 across a weary traveler’s forehead: “Following the 2014 record of $2.35 billion, total fees and surcharges collected by U.S. hotels are forecast to increase to another record level of $2.47 billion in 2015.”

I get it. Hoteliers are jealous of the profits wrought by airlines’ “ancillary fees” — totalling many billions in 2014, per research out of IdeaWorks and CarTrawler. Wrote Money Magazine:the largest three U.S. carriers (United, Delta, and the newly combined American and US Airways) racked up $13.7 billion in total ancillary revenue in 2014. Add in Southwest and the total goes to $15.6 billion.”

You know what? The airline fees don’t bother me that much because, mainly, I dodge them. I never check a bag.  I buy no food on board. I have a stack of free GoGo passes. I don’t fly the three carriers that charge for carryon (Spirit, Allegiant, Frontier).  I don’t buy alcoholic beverages in flight.  I don’t buy movies. Call me a skinflint but my credit card pretty much stays in my wallet at 30,000 ft.

I don’t even spend much money at airports which I have said generally ripoff passengers.

Hotels however get my goat, with an ever expanding list of fees. NYU’s Bjorn Hanson itemized a stultifying list of upcharges in his report:Examples of fees and surcharges include: resort or amenity fees, early departure fees, reservation cancellation fees, internet fees, telephone call surcharges, some business center fees (including charges for receiving faxes and sending/receiving overnight packages), room service delivery surcharges, mini-bar restocking fees, charges for in-room safes, automatic gratuities and surcharges, and baggage holding fees for guests leaving luggage with bell staff after checking out of a hotel but before departure, and charges for unattended parking. For groups there have been increased charges for bartenders and other staff at events, special charges for set-up and breakdown of meeting rooms, and administrative fees for master folio billing.”

These hotel fees just are harder to dodge and, sadly, they are spreading.

Even Hilton and Marriott have ended same day, free reservation cancellation.

Here’s a list of obnoxious hotel charges I put together last year.  Egregious things like early check in fees – the room is, obviously, empty, right? $5 to “restock” the mini bar, on top of the $10 you are nicked for the $2 candybar?

Resort fees have irritated me since I first heard of them and, really, $40 a day for pool towels, “free” activities, a newspaper I do not want and, oh, did I mention the invariably wretched hotel WiFi (which is why I usually use a personal hotspot).  

Hanson noted that resorts are getting ever more clever (or greedy?): “Other of the more recently introduced fees and surcharges include charging for unattended surface parking in suburban locations.”

Why would I pay extra to park in a large lot built for that purpose? I understand paying a stiff fee to park on the Upper East Side – but in Scottsdale? 

I am also hearing anecdotal commentary that more hotels are charging guests for taking stuff from the room – everything from the obvious (bathrobes) to the bizarre (toiletries – who charges for them?) Towels, ashtrays, bottle openers are also showing up as add on items on guests’ bills.   Note: if you have stories about these purloined item charges, tell me – rjmcgarvey@gmail.com. I want to document a story.

Here are the problems with the avalanche of fees:  (1) often they are hidden and, if not hidden, they are not exactly made clear.  Word of advice – if resort fees in particular are not plainly disclosed, decline to pay them. Check on a mobile device. (2) We have met the enemy and he is us.  If we don’t protest greedy, grasping, illogical hotel fees, we will see more of them. It’s that simple.
Draw your personal line – and don’t accept one fee beyond it. That is how travelers can – and must – fight back in 2015.

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Note: I am also looking for cases where people believe a hotel or convention center blocked their WiFi and disabled their ability to create a personal hotspot. Email rjmcgarvey@gmail.com

The War Between Hotels and OTAs: We Win, Who Loses?

The New York Times has made it official: war is on between the big hotel groups and the online travel agencies (OTAs).  Let me tell you: there will be losers. But it won’t be us.

At least no time soon.

I cannot remember the last time I booked a flight at an OTA, mainly because United and American (nee USAir), the two carriers I generally fly, have well oiled websites that do pretty much everything I need to comfortably fly, on my terms. I track my frequent flyer miles, pick my seat, if I want, I may buy an upgrade with miles, and – sometimes – I have even bought bundled hotel nights at jaw dropping prices (because that hotel rate is “opaque,” meaning it evades the rate parity demands of the OTAs).  

Other than Las Vegas hotels, I also cannot remember the last time I booked directly with a hotel.  I am much more likely to use Expedia or HotelTonight, even Amazon Local, and, honestly, I’ve come to see hotel websites as garish eyesores populated with really bad images, worse copy, and balky booking engines that just weren’t worth the bother.

(I only go to Las Vegas for big meetings which have special rates and – usually – special booking sites.)

But now the big players – Marriott, Hyatt, Hilton, Starwood – want to change my mind about the wisdom of booking directly with them and they just may be succeeding.

It’s about money of course. The OTAs nick the big chains maybe 15% on every booking and that is money they hate to part with. (The OTA rate has never been confirmed and it also varies from case to case. But multiple sources have whispered the 15% rate to me as a good average for the industry giants.)

Say it’s a $200 hotel room. That means $30 is in play – the hotel can afford to give me up to $30, just to get the direct booking and to spite the OTA. And that is exactly what they now are doing. Reported the New York Times: “major hotel chains are offering a host of benefits to lure travelers to book with them directly: digital check-in, free meals, Wi-Fi and even the ability to choose a specific room.”

You want free breakfast? Done. Upgraded WiFi, no charge? At your command.  Maybe bonus rewards points? Done.  

Some chains even are withholding loyalty points on rooms booked through OTAs and that is a direct shot in this bow.

Give this a few years and my bet is that most frequent traveler hotel bookings will have migrated to the big chains’ own websites and away from the OTAs. Besides saving OTA commissions they also will gain better – more direct – communication with guests and that makes them salivate. They definitely have skin in the game and will play accordingly.

We also will be winners because frankly we are being bribed. The hotel chains can see the prize- our direct loyalty – and they are grasping it. With free WiFi, drink coupons, whatever it takes.

Who stands to lose? Obviously the OTAs will see sales reduction but, to me, the blood on this track is likely to be that of independent hotels and very small hotel groups. For one thing: they are paying OTAs as much as 30% on every booking.  On a $200 room, perhaps $60 goes to the OTA. Ouch.

That number is unlikely to go down.

Independents lack negotiating clout and as the chains squeeze the OTAs the logical place for OTAs to squeeze is the independents. They are unlikely to lower that 30% rate.

For two: at the independent hotel websites I have looked at, the booking engines are creaking antiques, just bad code, and there is no clear path to tweaking them to offer me the amenities and upgrades that the chains are using as bribes. Independents also lack loyalty programs in most cases, too, so no bribes possible there.

For three – and probably case closed – independent hotel websites that I have looked at are plain wretched, many are much worse than the sites of big chains.  I have no idea who designs these sites but, probably, neither do the hotels that put them up. They are just Internet train wrecks, flecked with hyperbole, false claims, and lots of creepy shots of models.

A lot of independents also are addicted to their profits from resort fees – a personal hatred – and they are not eager to surrender those dollars.

Independents, too, at least many of them, just are slow to move.

But if they reading this, they just got their wake up call and let’s hope they are listening.