5 Reasons New Hotel ‘Coronavirus Surcharges’ Are A Terrible Idea

One Mile at a Time says that one major hotel chain is considering a ‘coronavirus surcharge’, a price added onto the room rate because of the high cost of cleaning and social distancing.

There are several problems with this idea.

  1. Surcharges are meant to trick consumers. They show lower rates when comparing pricing against other hotels and chains, but click through and there’s a higher total cost.

  2. Hotels need trust now more than ever. We need to trust that they’re going to be disinfecting properly, that hotel housekeepers will actually change the sheets not just make the bed, that enhanced cleaning really is happening. How likely are we to trust a hotel chain that tries to slip by a price increase while telling us it’s good for us?

  3. The biggest problem hotels face is not enough customers. The cleaning costs will amortize themselves nicely if there are enough guests. The solution to not enough guests during a global pandemic and severe recession is to raise prices which is what a surcharge amounts to?

  4. Hotels are already being investigated by state attorneys general for this. Whether they call it a resort fee, a destination fee, a venue fee or a COVID-19 fee it’s still a mandatory charge which means it’s a deceptive practice when it is not included in the room rate. Hotels are struggling, they’ll be struggling even more under the mountain of legal fees and fines they could be facing for doubling down.

  5. Oh boy if this is Marriott… Arne Sorenson says resort fees are good for you. Marriott, unlike Hilton and Hyatt, charges loyalty program members these fees when redeeming points.

    If the fees aren’t deceptive and consumers calculate them properly when comparing room costs and making decisions where to stay, then all they are is a tax on loyalty program members and a devaluation of Bonvoy points. And it’s Bonvoy members the chain needs to lean on most to recover

Hotels can and should adjust pricing to generate the most revenue they can. That’s called the room rate, and hotels publish numerous different rates every day and vary their rates as needed. They can also incentivize use of on-property facilities, or raise and lower prices at those.

The worst approach would be for hotels to act in a deceptive manner, and undermine trust, when they’re struggling to fill even 40% of rooms and need that trust to get customers to travel let alone choose them for that travel. And raising pricing when occupancy is low, in the middle of a severe recession, seems like the height of stupidity.

Ultimately though the message that cleanliness isn’t part of the hotel’s basic product, that it comes at an extra charge, is perhaps what’s most disturbing.

Karl Marx said history repeats itself first as tragedy then as farce. Destination and venue fees were hotels repeating resort fees as tragedy, a COVID surcharge must be the farce?

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. *Destination fee
    *Corona Virus management fee
    *Cleaning disinfectant fee during crisis
    * Elimination of breakfast buffet surcharge to transition to Ala carte menu

  2. Simple fix. Make these charges subject to the room rate tax, and you have removed the financial incentive.

  3. @Beachfan – Your idea is a good one but doesn’t create an active disincentive for the hotel. If any surcharges are double taxed, there’s an active reason to remove all these BS charges.

  4. I like idea of beachfan but the hotel would just pass along the tax to customers as well. Hotels have larger problems than adding junk fees. For example I had a front desk person at a Hampton Inn yell at me and every customer coming into the lobby for brown bag breakfasts this morning because we didn’t have masks on. Then when people pushed back he berated them in public and was literally yelling at customers. Not something that will make me return to that hotel or even to a Hilton brand very soon. People have gone crazy and hotel management is no exception with these fees it seems.

  5. @DaninMCI Thanks for letting us know that Hilton is concerned about the health of its customers. Sorry to see you go.

  6. I cheer that Hampton Inn just like I cheer that Costco in Vegas!

    (separately – will not surprise me in the slightest if the unnamed hotel chain is Marriott, because of course)

  7. @DaninMCI. Hilton is lining up a minimum wage employee to be a traffic cop for a much bigger issue. That sucks. Hilton should be ashamed. That’s never going to end well. If Hilton wants emotional intelligence, they need to pay / compensate for it. At the same time, I’m an immune compromised individual (MS). I’ll add … I’m a former veteran. I’m a purple heart and took an IED for this country. Why aren’t you wearing a mask? Sincerely, it’s not about you…it’s about me. Please wear the g*dd*mn*d mask. This is solidarity people….you’re wearing the mask to protect your neighbor. Whatever axe you have to grind…find another basis. We are one people. Don’t be an idiot.

  8. Went to dentist yesterday, there was a $10 covid-19 surcharge .

    The new magic word will open every door for them, dont waste a good crisis.

  9. FF78 if I’m walking out the door to the parking lot to get into my car I usually don’t wear a mask. Keep in mind he was standing behind a plexiglass screen openly shaming people like a judge. Not asking them, not advising, not requesting. It was the strangest thing I’ve ever seen in thousands of hotel stays. Mostly I avoid wearing a mask for long periods because of my COPD and Asthma so try not to put mine on until I’m within 20 feet of people, not walking by myself out the door. But it wasn’t that I minded him reminding me of the issue but he was yelling at everyone and berating people. He literally followed my wife and me out into the parking lot halfway to our car without allowing a response. Dhammer53 nailed it. He would of “Asked” not literally yelled at people or chasing them physically through the lobby to try and shame them. You had to be there to understand this issue. It wasn’t as simple as “sir we need you to wear a mask” or “could you please put on your mask here in the lobby”. I’m sorry I brought this up in this forum as there is no way anyone reading this would think it was appropriate. The fear and anger in his face were amazing.

  10. If it is Marriott International and its 30-brands, then I would at least want them to have a corporate policy that includes mandatory mask wearing of all public facing employees – something that currently is NOT in place – even though every employee is wearing one in their new Bill Marriott narrated video about new cleaning procedures.

  11. And just when I was starting to feel bad about the losses the hotel companies are taking. Couldn’t happen to a nicer bunch of scoundrels, apparently. I rigorously avoid staying at places with scam charges, and will add this to my list of deceitful practices to be on the alert for. If you feel you need to charge a higher price, charge a higher price. Don’t try to trick people with this garbage.

  12. @Beachfan sees the real incentive here. A great experiment would be to lower the federal excise tax to ~6% (make it revenue neutral at the current mix of fare+fees) but apply it to fees as well. Lets see what the market does when it’s not incentivized to unbundle fares to avoid the excise tax. Would every airline revert back to a [mostly] Southwest model or would we still have a lot of Spirits?

  13. @Steve, the problem is that the hotel fees are simply there to hide the real cost of a room from the customer on searches. The airlines are not allowed to advertise fake prices. The extras you pay for on Spirit are your choice. If you don’t want those services, you can fly at the advertised price. No so with the hotel scam.

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