Hotels Consider Adding COVID-19 Surcharges

“Destination fees” have been one of the most annoying trends we’ve seen in the hotel industry in recent years. Well, get ready, because a COVID-19 fee or surcharge could be the next thing added to your hotel bill once travel resumes.

Hotels may add COVID-19 fees

Many hotel loyalty programs have private online communities they use to get feedback from customers. A reader shares with me that a major hotel group’s online community is asking members about how they’d feel if hotels would add COVID-19 fees to the cost of stays.

As it’s explained, the impact of COVID-19 is impacting the hotel business globally, so hotels and restaurants may institute new COVID-19 fees as they reopen, which are likely to be a percentage of the bill.

The representative from the hotel group confirms that they don’t have plans to move forward with this concept yet (I think “yet” is a key word here), they want to know how members would feel about this. As you’d expect, the response is almost universally negative.

What is a COVID-19 surcharge, anyway?

I don’t know of any hotels that have added these COVID-19 fees yet, but I suspect that if one major global hotel group endorses this concept, they could spread like wildfire.

I’ve seen some news stories about a limited number of restaurants adding COVID-19 surcharges, and the concept seems to be as follows:

  • Restaurants don’t want to permanently raise prices, but would prefer adding a temporary surcharge that can be adjusted
  • This is intended to reflect the increased costs of some goods, the challenges restaurants are having covering their expenses, dining capacity being limited, etc.
  • For restaurant surcharges that I’ve heard of, they haven’t been huge; we’re talking somewhere around 5%

I totally understand the challenge that restaurants face. Many restaurants are small businesses, and they’re in such a terrible spot right now (as are so many other industries). When we order food from restaurants for takeout I tip much more than I usually would, because I recognize the struggle and want to do what I can to support them.

However:

  • The challenge is that so many people are struggling right now, so raising prices while also trying to encourage a return to normal is challenging, since people don’t have as much disposable income as before
  • I understand the concept of costs increasing for restaurants, but there’s an element of supply and demand here; just because costs for restaurants are increasing doesn’t mean people are willing or able to pay more to get food from restaurants, because they have other options

I get the struggle, but this isn’t the way to go about it

I’m not a fan of COVID-19 surcharges in any form, but personally I think this is a particularly terrible idea for the hotel industry:

  • Unlike most restaurants, hotels already have dynamic pricing every night, so if they want to charge more they should just raise prices
  • The optics of this could be terrible, as guests want to be reassured that it’s safe to travel, and a fee related to COVID-19 sends exactly the opposite measure; should guests feel like they’re being charged a fee so the hotel is clean?
  • Beyond that, the hotel industry has a massive uphill battle in convincing people to travel again, and a surcharge related to the very reason people aren’t traveling sends the wrong message

Bottom line

Over the past few years we’ve seen a ton of hotels add resort and destination fees as a way of extracting extra revenue. To those hotels considering adding COVID-19 surcharges: don’t do it!

If you need to raise rates then raise rates, and let the market decide. But it’s a complete slap in the face to customers if you’re trying to get away with charging a hidden surcharge related to COVID-19, no matter how you market it.

How do you feel about the concept of hotels adding a COVID-19 fee when travel resumes?

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AlexS Diamond

I make it a point to intentionally avoid hotels which charge additional mandatory fees. This will just be one more reason for me to avoid at certain properties. Even this past week, I intentionally chose the property I stayed at due to them NOT charging resort/parking fees whereas the surrounding hotels were. As far as additional costs incurred -- bull. Cleaning required for COVID is no different than what *should* be cleaned in flu season, or any season for that matter. Even the minute amounts of chlorine/chloramines in tap water are enough to break apart COVID. The traditional cleaners used in a hotel will work just fine.

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Hunterlas Guest

We got a law passed forcing airlines to show the all in price when we shop, they need to do the same for hotels. This is ridiculous

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JAY1951 Guest

Why on Earth would a business think it can increase demand by charging more? Hotels, restaurants, bars, clubs; all struggling, most still closed by local laws and restrictions. When they can, they want be back and think I'll pay a premium for the privilege of handing them my cash. When they reopen, AND when it's viable and safe to travel to them, I'll already be thinking carefully about the risks, and how satisfied I am with their hygiene regime and transmission suppression protocols. Higher prices are not the way to help overcome my reservations (not a pun!).

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Bill Guest

Businesses that decide to raise prices now in this climate should expect to lose a lot of business.

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SBL Guest

Guys! You have to realise that your resort fees and the habit of displaying tax exclusive prices prior to the final checkout page is almost exclusively an American anomaly.

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