Hotels Consider Adding COVID-19 Surcharges

Filed Under: Hotels

“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?

Comments
  1. I am fine with them adding a surcharge — they should just be required show me the full price baked in.

  2. Adding a fee to clean a hotel that should already be cleaned will go over exactly how we all predict.

  3. Demand is down because of COVID, so hotels want to increase the price. What could possibly go wrong?

  4. Will avoid any hotel that charges a COVID fee. What is it included? That they now clean the elevators for our convenience? What a joke.

  5. “I get the struggle, but this isn’t the way to go about it.”

    Absolutely. I get that operating a property will become more expensive. But reminding customers of COVID as they go through the booking process is a dreadful idea.

  6. I guess we’ll see if this becomes the same thing as Airline fuel surcharges that will never go away.

  7. “…adding a temporary surcharge that can be adjusted”? Fees never go away. If a hotel is fogging the room after every guest, sure. And as @AdamH says, just show me the all in price.

  8. They can charge all the fees they want, but they should be required to advertise the total price included fees.

  9. Side rant: Why can’t hotel booking show us the entire price when shopping?
    For flights, when you find a $800 flight, $800 is what you’re going to pay for.
    For hotels, when you find a $150/night rate, you’re actually paying up to $200/night by checkout, and then when you get to the property they will also charge you a $30/night “resort fee” just to make sure we’re really getting fleeced.

  10. @RCB +1
    @TravelinWilly +1

    Spot on, baked in or not, I won’t be staying at hotels that charge such fee. Not only hotels should waive “resort” and other scam fees but they also should throw in gratis parking to stimulate travel.

  11. @ Ben — This is ridiculous. They should be lowering their prices, not raising them. Basic economics.

  12. Does that mean we’ll see a facility closure credit on our folios as well? With limited housekeeping, breakfast benefits being watered down, gym and pool closures and whatever other amenities were cut, there should be plenty of savings to help cover additional Covid-19 expenses.

  13. I guess hotels really want to go out of business.

    After resort fees, you now add COVID fees.

  14. Virus surcharge is the new resort fee. The hotels should be very careful with this nonsense fee addition. I agree if they want to charge more, raise the rate per night and stop with the addition of fees. Cleaning the room is a cost, add it into the cost of the room per night.

  15. Ridiculous idea. If you have higher operating costs, increase the rates to cover it. Given a choice, I would go out of my way to avoid a hotel who adds this surcharge

  16. Reminds me of the early 2000s when hotels in California added “energy surcharges”, which ended in class action lawsuits… I seem to recall eventually getting some token payment or discount code from Starwood.

  17. @Andrew +1

    A lot of perks and services are currently diminished and will continue to be going into the future. The all you can eat breakfast buffet will be gone, replaced by nothing or grab and go muffins. Pools and gyms are closed (or will have limitations). I read an article recently where a representative from one of the major chains discussed less housekeeping during the stay (think new new towels on demand vs. a daily room cleaning), with focus on a deeper clean between guests.

    I understand the hotels are hurting, but to add a fee while simultaneously limiting benefits is not going to go over well.

  18. Good lord! Just show me the ALL-IN price for cryin’ out loud. If we see $450/nt on a website make it $450/nt. I hate checking thru and seeing $450 morph into $595! Can’t stand the games hotels play. It’s insulting and time consuming.

  19. Its called price signaling. Collusion is ‘illegal’, put get an ‘hotel group spokesperson’ to float the idea out to the travel media and it is a legal way of signaling your competition that you are considering it.

    Classic game theory behavior of an oligopoly.

  20. If they are going to false advertise, why not just go all the way and advertise rooms for $1 a night, then add a $199 bed surcharge?

  21. Like you mention, this seems like a puzzling idea for hotel groups that are already facing uphill battles in terms of demand.

    Personally, I’ll be opting for Airbnbs and rental houses when things start becoming safer for travel. From what the scientific community and the CDC knows of COVID, it’s exponentially more likely to be transmitted person-to-person rather than by surface contact. So I’ll be much more comfortable staying in lodging that isn’t trafficked daily by hundreds of guests, staff, etc. Even if surfaces may be more likely to be contaminated in Airbnbs (because I imagine they don’t have as strict or consistent cleaning guidelines as do hotels), the built-in social distance of private rentals provides the best security against the virus.

  22. That is how we will select where we want to stay. Unless the entire industry charges this fees we will go where they don’t. I never paid resort fee or BS fee that has been charged by many hotels. As for cleaning, hotels should be clean. That is standard. So don’t start like United with this BS about partnership with Clorox, etc…. I don’t care. Being clean is the default.

  23. What you all forget is that you want the nice cheap hotel nights and the nice cheap flights, without realising that the hotel chains and airlines have to foot the bill for hiring more cleaning staff, buying more expensive cleaning material and spending more money in marketing to make these changes known. You’re fooling yourself and this post is extremely naive. Pay up, be realistic and stop your entitled whining!

  24. One area where the UK and many other countries have got it right (by law the price you display is the price the guest pays at checkout unless they ACTIVELY SIGN UP to extra items) and the US has got it very wrong. Regulation isn’t always bad….

  25. I would like to see hotels do this, cause outrage, then congress finally steps in and mandates full transparency pricing to hotel rooms similar to airfare.

  26. Telling me that a hotel room has been cleaned earns my business. Adding a cleaning surcharge drives my business away. How are they expecting me to feel when I see the surcharge – charitable because their business is suffering?
    I’m one of the 40 million newly unemployed. I’m happy to donate to legitimate charities but businesses have loans and government grants they can draw against to hold them up during this downturn. Great business leaders will find cost effective ways of maintaining hygiene or offsetting costs in other ways that keeps prices competitive.

  27. Unfortunately hotels lost trust with the fake resort fees. Plus, hotel rates are all dynamic, like airfare. They can bake it into the price. Unlike restaurants which menus are fixed and prices don’t fluctuate from day to day.

    Absolutely no hotel surcharges.

  28. At this point i almost respect the hotel chains for their creativity in charging fees.

  29. Should we assume that any hotel that charges guests a COVID-19 fee is essentially encouraging and granting said guests permission to spread COVID-19 across the property, to not be required to wear masks under any conditions, and to ignore all social distancing recommendations? If so, cool, very progressive. If not…if just a scheme to generate revenue under false pretenses…such hotels deserve to get burned to the ground.

  30. @Shawn – Great guess but it isn’t Marriott this time. Or at least they aren’t the ones that put this idea out there that Ben is writing about.

  31. One thing I’ve been noticing is the number of businesses who are using COVID as an excuse to, in some way, either raise the cost to consumers or to cut back on certain services that benefit the customer. Always under the guise of “safety”; however also rather convenient to them. Brand new “no return” policies at stores come to mind – even if you have a receipt, if it left the store it’s contaminated and sorry. Yes, you can justify their argument – or argue the other side of it. Still it benefits the store in that they aren’t giving refunds any more.

    Which brings me to hotels and proposing a “Covid fee”. And I see people here who like this idea. Why? It will simply be a rather sneaky extra fee that will cost you more money for the same service you would have ordinarily pay for. An obscene profit fee, so to speak. But I will admit, masking it as a “Covid fee” will have certain segments of the population wet themselves before genuflecting out of admiration for the virtue of such a thing. Nice try, hotels – nice try.

  32. This reminds me of fuel surcharges that never seem to disappear once added. I sent a package with DHL last week, and they added a fuel surcharge. Aren’t fuel prices at historic lows right now?

    Soon cleaning fees will be the same.

  33. I read on another site that Marriott plans to reduce housekeeping service to only be done before check-in and after check-out. If that comes true they should have lower housekeeping costs and lower service level. It would not be a smart move to add a hidden fee while reducing service levels. It would be a perfect recipe to send customers to competitors…

  34. It sort of makes sense for restaurants with fixed prices and menus.

    Given hotels have dynamic pricing it doesn’t make any sense given they could bake it in to the room rate, just a way to try and trick money out of you.

    As others have said, bake it in to the full price and if they want, a comment explaining it.

  35. I don’t believe for a minute that my room or anywhere else in the hotel will be any cleaner after such a fee is imposed as it ever was before the world ever heard of COVID 19.

  36. Ridiculous. The time for legislation forcing upfront displays of all-in pricing for hotels is way overdue.

  37. For restaurants, I’m OK with a TEMPORARY 5% or so surcharge…..But for the hotels that have been screwing USA to the wall with their ‘destination or resort’ fees. To hell with them. If they want to raise rates, I won’t like it, but I guess I get it. But charge me another separate fee (that will never go away and will only be blended into the resort or destination fee, I’ll rent an RV.

  38. @Bobo Bolinksky

    I might suggest, pee into the pool. Not in the pool but into the pool, preferably from your pool view room.

  39. Oh. Ya. I’ll book your hotel cuz you charge me an extra fee when you don’t even do any additional cleaning. Let me get right on that.

  40. Aside from hating the add-on nonsense charges, I expect a sanitized room when I check in which includes all surfaces. This is what we expect from a decent hotel. Sanitizing between guests is proper due diligence for a hotel, pandemic or not. I make sure it’s done in our offices as well.

    Further, with Covid, I will “make a green choice” or equivalent and keep the do not disturb sign on the door permanently. I do not want anyone in my room, period. I can make my own bed. The best way to keep a room Covid-free is to allow no-one but your family to enter during your stay.

  41. Add any surcharge for COVID and I will NOT stay at your hotel! If Las Vegas still thinks that they are going to continue to add resort fees of ANY type I will say good bye to them as well! People are just sick and tired of getting ripped off left and right and nickle and dimed!

    These extra charges should be made illegal!

  42. Reminding customers of Covid while travelling does not sound like a good idea to me. I understand that most hotels are hurting, however, the best way to recoup any revenue is by slightly raising the price of the room. I would be livid if there was a resort fee AND Covid fee.

  43. Have you seen a California hotel and restaurant bill lately?

    State Tax
    Employee health insurance surcharge.
    Environmentally friendly practices surcharge.
    Covid 19 Surcharge.
    Tips (Ps. California is a high cost state, don’t insult our employees with anything less than 25%)

    It’s getting as bad your phone bill or a traffic ticket (speeding fine is $35, costs, penalties and surcharges increase it to $700).

    This ridiculousness needs to stop we’re heading for a world where everything costs $1 and the final bill is an unknown amount of $100’s. It’s like reverse gambling, try and guess what you’ll end up paying.

    Another practice, car rental $25 surcharge for airport or city center rentals. Try and find a branch that’s not either at an airport or in city, non exist. It’s a complete scam.

  44. I’m looking forward to being charged for electricity, water and internet. Oh wait, they already charge for internet

  45. I expect some customers to push back hard and ask for a waiver of any resort and urban destination fees. I would refuse to pay for all these extra fees given the drop in demand.

    Marriott can cut back on the frequency of housekeeping, but it will take longer to prepare each room for a new guest. I expect that to make the labor cost have no chance. Any extra cost will come from using more cleaning supplies and needing to buy more equipment for cleaning.

  46. A lot of the local rules for lodging allow for some savings for the hotel so they possibly can have some trade off that make the extra steps for the Covid era less taxing.

    1. Some locations are only allowing housekeeping on the check out dates so that should help keep housekeeping cost down on guests staying more than a night.
    2. Complimentary items like snacks, drinks, and coffee will not be expected by guests.
    3. Amenities like gyms could stay closed cutting down on upkeep and cleaning cost for a few months.

    Hopefully enough parts of the business are being paused to help cut the costs on the extra steps for the COVID era

  47. If you want to hate on fees, then the hate begins with the OTAs. Hotels have largely de-coupled their rates to keep more revenue for themselves. The OTA commissions are out of hand ranging from 12- 25% per reservations. This is a huge! cut of the revenue for any hotel, much less that the OTAs have also tried to shift OTA processing fees to the hotels, so all in a hotel is taking net a potential 30% haircut on any reservation booked via an OTA. The OTAs are shafting all customers by gouging hotels.

    A hotel can circumvent some of the commissions by reducing rate, then charging a higher resort fee which is paid directly to the hotel, thereby keeping more money in their pocket. The cleaning surcharge will be just another variant to keep more money and bypass the OTAs.

    If you want some of this to end, book direct. Every.Single.Time. Ask for price match if you find a lower rate on an OTA. Any hotel that is not an idiot will match because the price parity issue is their fault. Once we start booking direct again and hotels can cover their expenses and not get shafted on every single reservation, some of this fee crazy money grab should subside.

    Legislatures are pressing on Uber Eats / Grub Hub/ etc to limit fees, why aren’t they going after OTA and hotel commissions? It is literally the same thing and killing hotel margins.

  48. I think the industry will have enduring shell shock now that we know what we can and will do without. Deep clean in between guests otherwise no one need enter my room during my stay.

  49. Absolutely not. Rooms should be cleaned to a high standard anyway

    As others have said there really should be a clear up front price when booking.

    If I see a price then that’s the price I should pay and I shouldn’t have a heart attack when I click through to see what the taxes are and the resort fee etc. It’s not beyond the wit of man to programme those calculations when people do a search for a room.

    If the likes of Expedia can show a single price (even if it’s charged to me in two parts) then the hotels can do it as well.

  50. In Dubai where I live, in the next six months, the estimation according to a CNBC article published today, is that up to 70% of the hotel and restaurants will shut down. I think the surcharge will be their last thought right now.

  51. “Have you seen a California hotel and restaurant bill lately?”

    That was my first thought too. Eventually these states are going to run out of other people’s money to fund their wild spending.

  52. Whahahahahahahaha.. owh wait you are serious?! I guess they missed some classes at school. People are not allowed to travel so occupancy rates drop. Wait let’s try to get the people back by increasing the rates and call it Covid-19 charge. Because we lost a lot of profit due to this virus. You keep forgetting that a lot of people lost their jobs and income. So, spending money on holidays will become tough.
    To be positive: We WILL travel again (and yeah I know which hotel )

  53. No doubt, Arnie at Marriott is will be the first to jump, no hotel company CEO is better than him at squeezing another nickel out of a guest,

  54. Hotels should be doing whatever they can to convince people to travel, and a new fee isn’t a good way to do that! Lower prices stimulate demand. Higher prices reduce demand, simple economics. If I see such a fee on a hotel, I will not stay there.

  55. Why do hotels even bother asking people about extra fees? In what scenario do they envision consumers saying “Hell ya, hit me with more extra fees!”.

    Hotels can feel free to add their stupid fees, and we’ll see whether consumers will still stay with them in this economy. This is a buyer’s market, hotels are dreaming if they think they can even charge regular rates, let alone regular rates + fees.

  56. I will definitely object this idea. Customers are always the victims. when hotels and airlines are making a lot of money with high occupancy they will continue to charge even more instead of saying thank you, we make tons of money and we will lower the price to show appreciation. When they are losing money why customers have to pay for it….Yes. They have the right to add this and that fees, and we should boycott any hotel and airline implemanting these fees.

  57. 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.

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

  59. 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!).

  60. 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

  61. 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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