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How to find (and avoid) those hidden hotel fees

Fees collected by the hotel industry this year will hit a record $2.1 billion, and a lot of those fees are for services you haven't even used.

By Smart Spending Editor Aug 16, 2013 3:55PM
This post is by Mitch Lipka for Reuters.

MSN Money PartnerIf anyone is an educated hotel guest, it's Bjorn Hanson, dean of New York University's Preston Robert Tisch Center for Hospitality, Tourism and Sports Management.

Image: Woman surprised (© Purestock/SuperStock)But even Hanson got confused during a business trip a few years ago when a hotel bill included $18 in charges for gratuities. One fee was for a bellman he didn't use and the other was for housekeeping service, even though he had already left a tip.

It took some discussion with the manager to get the fees dropped.

While travelers were complaining about airline fees -- additional charges for putting luggage on planes, reserving seats and other services -- the hotel business quietly experimented with fee after fee.

The result is that your bill at checkout can be confounding. Hotels are tacking on lots of extra charges in addition to sales tax and the tariffs from cities and states that apply only to the hospitality industry.

Common fees include resort usage, airport pickup, parking and gym visits along with charges for room service.

Some of the more surprising charges include a fee for moving items around in the minibar (not actually consuming any), a bellman (whether you use one or not), the room safe (even if you don't stash valuables in it), checking out early, checking in early and upgraded amenities (such as shampoo). And here's a new fee: parking in an open, unattended lot.

These charges are most common at higher-end hotels, resorts and properties in urban centers. The new parking fee at suburban hotels is still relatively rare. Most hotels in the middle of the price spectrum -- the most popular segment in the U.S. -- continue to avoid most fees in favor of offering free Internet, free breakfast and free parking.

Fees collected by the hotel industry this year will hit a record $2.1 billion, according to a projection released by NYU's Hanson on Tuesday, who tracks hotel fee trends annually. That is double what consumers paid a decade ago.

Among luxury properties, 99% charge for a late cancellation, compared with 29% among so-called midscale properties, according to a 2012 study by the American Hotel and Lodging Association.

The biggest problem with fees, Hanson says, is not disclosing those that are mandatory. Last fall the Federal Trade Commission sent warning letters to 22 hotel booking companies for leaving details out of the price projection when consumers shopped for hotels. It is now common to find a section on fees on hotel booking sites as well as a disclosure when a "resort fee" applies.

"Increasingly, hotels give away free breakfast, free Internet, and now some hotels are trying to claw that back with 'convenience fees,'" says Robert Habeeb, president and chief operating officer of First Hospitality Group in Chicago, which operates 53 hotels, mostly in the Midwest. Fees vary at its properties but can include Internet connection fees ($11.95 a day at one property), a pet fee ($50 per stay at another property), breakfast and parking.

Hotels watch occupancy trends and change prices -- and fees -- constantly, Habeeb says. "It has become like you're trading a commodity on the floor of an exchange." Ultimately, he says, "consumers decide what they're willing to pay for and what they're not."

Overall, nearly a quarter of hotels charge for in-room Internet access, according to a 2012 survey commissioned by the American Hotel & Lodging Association. Wi-Fi charges are most common in so-called "upper upscale" and luxury hotels -- with the fee assessed at more than three-quarters of all properties in those categories.

Business travelers to big cities, in particular, are targeted for the Wi-Fi charge -- which can be as high as $15 a day. "If you're headed to downtown-anywhere, there's a good chance you'll see a Wi-Fi fee on your bill," says Jeremy Murphy, chief executive officer of TheSuitest.com, a travel website that analyzes hotel rooms and prices.

Making a stink

NYU's Hanson says it can be tough for consumers to understand what might end up on their bills. "Fees and surcharges are not even uniform across brands," he says. "They can change overnight ... That makes it very difficult for travelers to be aware and anticipate."

If you can, find out in advance what the extra charges are, and pay close attention to your bill when you're checking out. Tom Waithe, director of operations for Kimpton Hotels in the Pacific Northwest, encourages hotel guests to challenge charges they disagree with.

"The desk has, in many cases, the full ability to reverse a charge or reduce it, but be fair -- the charges are often posted in advance," Waithe says.

Read the registration card carefully. Says Waithe: "If you say you will pay for Wi-Fi and newspapers, don't be complaining at checkout that you didn't notice what you were signing."


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