What are hotel fees?
Hotel fees encompass a range of extra charges guests may pay for amenities and services. However, they are more than just additional charges on a guest’s bill. They can also be strategic revenue boosters that can significantly elevate your hotel’s profitability.
Examples might include resort fees that cover property maintenance, parking fees, or additional cleaning fees if guests bring pets.
While hotel fees can be powerful secondary revenue generators or a useful tool to mitigate additional operational costs, there is an art to applying them effectively. Too many additional fees will put guests off and have them question the value of their stay.
In this blog you’ll learn how your hotel can effectively, transparently and considerately apply fees to boost your revenue, reduce your overall costs, and keep guests happy.
Table of contents
What are the most common hotel fees and surcharges?
The most common hotel fees include resort and amenity fees for facility access, parking fees for vehicle storage, late checkout and early departure fees for flexible timing, reservation cancellation fees, extra person fees for exceeding standard occupancy, minibar and room service surcharges, internet and telephone charges, business center fees, in-room safe charges, baggage holding fees, and additional taxes like hotel bed tax. These fees typically cover operational costs and facility maintenance while providing guests with enhanced services and flexibility during their stay.
Let’s discuss these common hotel fees and surcharges in greater detail below:
Resort and amenity fees
These fees cover the use and maintenance of on-site facilities like swimming pools, gyms, and spas. They offer guests access to a range of amenities that elevate their stay, while also contributing to the upkeep of these facilities.
Parking fees
Whether it’s self-parking or valet service, parking fees provide secure and convenient options for guests who arrive with their own vehicles. These fees can be tiered based on the level of service offered. This can also include charges for unattended or long-term parking.
Late check out and early departure fees
These fees give guests the flexibility to extend their stay beyond standard check-out times or leave before their scheduled departure, while compensating the hotel for the inconvenience caused in room turnover.
Reservation cancellation fees
These are charged when guests cancel their bookings, especially if done at the last minute. They help mitigate the revenue loss from unsold rooms and encourage responsible booking behaviour.
Extra person fees
For rooms exceeding the standard occupancy, an extra person fee is charged to cover the additional costs of amenities and services.
Minibar or room service surcharges
These surcharges are applied to in-room dining or minibar usage, offering guests the luxury of convenience at a premium. This can also include room service delivery surcharges.
Internet fees and telephone call surcharges
While basic Wi-Fi might be complimentary, premium internet services or international calls can incur additional fees, catering to the needs of business travellers.
Business centre fees
For guests requiring access to computers, printers, or meeting rooms, a business centre fee may be applicable.
Charges for in-room safes
Some hotels offer in-room safes for an additional charge, providing guests with secure storage for valuables.
Baggage holding fees
For guests who need to store their luggage before check-in or after check-out, a nominal baggage holding fee can be charged.
Taxes and similar fees
While not traditionally considered a hotel fee, taxes can be considered in the same way in terms of it being an additional cost to your guest. Depending on where you’re operating, taxes may be included in the room price (e.g. GST), but there may be additional taxes that you charge a separate fee to cover, such as hotel bed tax, in some countries.
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Why is transparency important for hotel fees and surcharges?
Transparency in hotel fees is crucial because it builds guest trust, prevents negative reviews about “hidden charges,” and enables hotels to market services as value-added experiences rather than surprise costs. Research from Bjorn Hanson, a clinical professor at New York University’s School of Professional Studies Tisch Center for Hospitality and Tourism, revealed that hotels in the US have been collecting record amounts of fees, with the upward trend showing no signs of slowing down. This is no great surprise given that fees and surcharges can result in up to 90% profitability for savvy hoteliers. The figures also suggested that the growth in numbers is a reflection of the rise in occupancy rates, as well as the increase in the amount charged for fees and surcharges.
Furthermore, some new fees are becoming increasingly-common too. They include:
- Special charges for set-up and breakdown of meeting rooms
- Early check-in fees
- Fees to guarantee a specific room
- Charges for unattended surface parking in suburban locations
- Fees for holding checked luggage
Importantly, the research uncovered a rise in the disclosure of fees and surcharges among hotels in the US.
While fees and surcharges are sometimes labelled as ‘hidden’ or ‘surprise’ charges, there’s a clear trend towards greater transparency. Hotels are using websites, confirmation emails, tent cards in guest rooms, room service menus, and guest service binders to disclose about fees. However, guests can still be surprised by these fees, likely due to a lack of industry-wide consistency on what fees can, should, and will be charged. Unlike brand-guided or industry-standardised charges, some hotel fees are determined on a hotel-by-hotel basis and can fluctuate frequently. This individualised approach to setting fees contributes to the sense that they are ‘hidden’ or ‘surprise’ charges for guests.
Disclosure is key and being transparent with guests is necessary to avoid a backlash when it comes to fees and surcharges for extras.
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How should hotels disclose fees to guests?
Hotels should disclose fees during the booking process by presenting them as optional extras and add-ons through booking engines, websites, and confirmation emails rather than burying them in room rates. Effective disclosure includes upfront presentation with clear descriptions, seasonal availability settings, and multiple touchpoints like tent cards and guest service binders. Keeping fees separate from room rates avoids additional occupancy taxes, maintains rate stability, and allows transparent baseline pricing that guests can easily compare.
For example, using a tool like SiteMinder’s hotel booking engine, you can add several options upfront that range from breakfast through to secure WiFi – something OTA Agoda.com identified as important to guests when they’re choosing a hotel.
Additionally, you can enter extras and charges for many different scenarios via SiteMinder’s booking engine. Some of the most common fees applied by our customers include:
- Per Booking – Late Checkout
- Per Person Per Night – Hot Breakfast
- Per Room – Champagne on arrival
- Per Room Per Night – Fresh Towels
- Per Person – Day Spa Package
You can even attribute certain extras to particular rooms, such as ‘King Suite 3-Night Special’. The booking engine also allows you to set descriptions and images to enhance appeal, plus applicable start and end dates for seasonal offers throughout the year, such as Valentine’s Day and Easter.
While it might seem easier to package these extras into room rates, hoteliers should avoid burying fees and surcharges in base pricing. Potential guests closely monitor room rates and fluctuations in pricing can cause them to look elsewhere for better deals.
There are compelling reasons for keeping fees separate from room rates:
- Tax implications: Incorporating fees into room rates makes them subject to municipal occupancy taxes, increasing overall guest costs
- Rate stability: Room rates are highly dynamic and closely watched by travelers, whereas fees tend to be more stable
- Booking behavior: Many travelers focus primarily on room rates when making decisions, so separate fees allow for transparent baseline pricing comparison
Pichata Ritchie,
Cluster E-commerce Manager
VALA Hua Hin – Nu Chapter Hotels
How does transparency in hotel fees increase profits?
Transparency in hotel fees increases profits by building guest trust that encourages repeat business and additional service usage, enabling effective marketing of fees as value-added experiences rather than hidden costs, empowering guests to budget for extras which increases uptake, and reducing negative reviews that damage bookings. When guests understand exactly what they’re paying for, they’re more comfortable spending on amenities and view fees as legitimate services rather than unwelcome surprises, ultimately converting optional extras into integral guest experience components.
Here’s how transparency helps in detail:
Building trust
When you’re transparent about all the fees and charges, you’re essentially building a foundation of trust with your guests. This trust is invaluable; it not only encourages guests to make use of additional services but also fosters long-term relationships. A guest who trusts you is a guest who will return, and repeat business is often more profitable than acquiring new customers.
Effective marketing
Being upfront about charges allows you to market these services as value-added experiences rather than hidden costs. Whether it’s a spa package, a guided tour, or a special dining experience, clear pricing enables you to package these services in a way that makes them more appealing. This turns what could be seen as optional extras into integral parts of the guest experience, thereby increasing uptake and revenue.
Budget-friendly for guests
When guests know exactly what to expect in terms of charges, they can budget their trip more effectively and allow them to splurge on additional amenities, knowing that there won’t be any unexpected costs. Essentially, you’re empowering your guests to make informed choices that enhance their stay, and, by extension, empowering your business to create more meaningful value adds that are actually taken advantage of.
Positive reviews and recommendations
Transparency in pricing leads reduces the risk of negative reviews along the lines of “we got charged for every little extra thing! Stay away!”. In the age of online reviews and social media, de-risking around word-of-mouth marketing is incredibly valuable and contributes to increased bookings and, by extension, higher profits.
