Uh Oh: One Hyatt Hotel Adds 3.5% “Energy Charge”

49

Is an “energy charge” about to become a standard fee with the major hotel groups?

Hyatt Place Chicago O’Hare adds “energy charge”

The Hyatt Place Chicago O’Hare is now adding a daily energy charge to its room rates, in addition to city and state taxes. I don’t see this disclosed anywhere on the hotel’s policies page, or on Hyatt’s website otherwise, but rather this fee is added to the room rate breakdown during the booking process.

The Hyatt Place’s energy charge seems to be a flat 3.5% of the base room rate. You’d think an energy charge would be a fixed amount rather than a percentage of revenue, unless there’s science suggesting that people paying a bit more to stay at a hotel use more electricity? 😉

I recently wrote about an independent budget hotel in Las Vegas adding an “energy surcharge,” though to my knowledge this Hyatt is the first hotel belonging to a major hotel group that has added a fee like this. I find it particularly surprising that it’s a random airport hotel that seems to be the first to embrace such a fee, rather than a hotel that already has “junk” fees (like a destination or resort fee).

Could an “energy charge” soon become a hotel industry standard?

It’s probably worth understanding why a hotel would offer a fee like this. Obviously there’s a cost associated with providing electricity, but that’s something that has historically always been included in the room rate. What’s the logic of an energy charge, rather than just raising room rates by 3.5%?

  • It’s a way to make consumers believe that hotels are less expensive than they actually are, especially without proper disclosure during the booking process
  • It’s a way to reduce commissions for travel agencies compared to just adding it to the room rate, since travel agencies only get a commission on the base room rate
  • It’s ultimately a way to try to pull a fast one, since the hope is that many people won’t notice a 3.5% fee, and even if they do, they won’t bother asking about it or fighting it

I’m guessing that the way the hotel views it, it can get away with charging this without lowering room rates or losing much business. It goes without saying that increasing room revenue be 3.5% could massively increase margins.

Could an energy charge become a standard industry fee?

Bottom line

I was shocked when a random hotel in Las Vegas recently added an energy surcharge, but figured that was a one-off. Now we’re seeing at least one Hyatt Place location add such a fee. This sure is a negative trend.

I suppose on the surface this is no worse than a destination or resort fee, it just makes you wonder how far the hotel experience can be unbundled. What’s next, a housekeeping surcharge, a water surcharge, a check-in surcharge, a check-out surcharge, a bedding surcharge, etc.?

Do you think we’ll see more major chain hotels add energy charges to room rates?

(Tip of the hat to Bryce)

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  1. BAYLIFE

    I bet there's also a "Negative Energy" charge assigned to rascals like yourself at checkout! ;)

    (Glad you stood up for yourself and walked the walk when necessary in Mykonos!)

  2. David

    I wonder why travel agents are fine with this development. Hotels might as well just charge $0 per night and have a bunch of "Employee Retention Fees", "Housekeeping Fees", "Hardware Upkeep Fees", "Property Insurance Fees" etc.

    1. Peer

      @OMAAT Not exactly on-topic, but something is off with the "helpful"-rating. I was just able to raise this comment's rating from 1 to 25 hearts by double-clicking "Helpful" for 12 times.

      Anyway: Cannot agree more. If the purpose of these fees is to take money from the OTAs, why don't they stand up?

    2. David

      Wow you're right, the website rollout has been a bit of a disaster.

    3. Erix

      Even it goes below zero. I made his rating -33. Sorry, just tried.

    4. W

      If I click once and then click twice on the “helpful” button, it decreases. I was able to lower your rating from 120 to 110, without adding anything - sorry about that ;)

    5. Peer

      Appears that this bug has been fixed now

    6. Grey

      What makes you think travel agents are fine with this?

  3. vdostoi1

    British Colonial Hilton Nassau has an energy surcharge as well.

    1. KC

      Ironically that is the hotel that employees and contractors of BPL (Bahamas Power) are required to book their stays.

  4. khatl

    Just saw a Kimpton in Portland including toiletries and directv as part of their list of things in the amenity fee they charge

  5. Doug

    There badly needs to be some class action lawsuits against this garbage. Eventually we'll be seeing $199/night rates at nice hotels that end up costing three times that.

  6. beachfan

    You missed the biggest one - taxes.

    1. GBOAC

      Actually taxes should be broken out so travelers can see exactly how much the city/county/state are pocketing. NYC is notorious for a huge tax bite

  7. kay_elemeno

    What a coincidence, I happen to charge the hotels I stay at a 3.5% very handsome guest fee. I guess it'll come out in the wash.

  8. Keyser Soze

    This has actually been happening for decades. I used to do work trips to Reno, NV in the mid 80’s. The two big “tower” hotels (Atlantis & Peppermill) started an Energy Surcharge in response to some now-long-forgotten energy crisis. The surcharge, naturally, Never Went Away.

  9. MoJoe

    Hope Hyatt corporate squashes this spurious fee like a cockroach. These fees are like mushrooms, they grow best where it's dark and damp.

    I really hope Hyatt properties don't go down this road.

  10. James

    This is worse than a resort/destination fee. With Globalist status (and all guests paying with points) the resort/destination fee is waived. This is a way to screw even their most loyal guests!

    1. Vaselenko

      I was thinking the same thing. World of Hyatt rules simply state that the resort fee is waived on award stays. However, if the fee is, essentially, called something else, then it is not waived. Wait a few more months. I am sure we will see a lot more hotels add “garbage” fees to circumvent the rules.

  11. ChrisC

    Just change the law so that all websites selling to the publc have to display the total charge of the stay from the get go for anything that is not voluntary for the room rate,

    So if I see $250 / night and I want to stay 3 nights then that means I pay $750 and not a penny more or less unless I chose to add an optional charge like breakfast.

    Whatever the booking...

    Just change the law so that all websites selling to the publc have to display the total charge of the stay from the get go for anything that is not voluntary for the room rate,

    So if I see $250 / night and I want to stay 3 nights then that means I pay $750 and not a penny more or less unless I chose to add an optional charge like breakfast.

    Whatever the booking agencies want to charge the hotels should be between themselves though the agencies could just say 'well our commsion rate is based on the charge less proper government fees and taxes and your stupid energy fee or resort fee isn't one of those so it's in the calculation of what you owe is'

  12. Martin

    Just called the hotel to ask about the charge. The person who answered said that the charge was implemented by the city of Rosemont. What nonsense. Just did a dummy booking at the Hyatt Regency ORD for the same night, 6/9 - No energy charge. They are also in Rosemont.

    1. Brian G.

      As I joke it would be funny if one of us stayed there and demanded that electricity for our room be turned off, so that we do not have to pay the fee.

  13. Gary

    I just emailed the hotel the following:
    As a travel expert and Hyatt Globalist, my extended friends and family have appointed me our travel Czar. Recently my phone has been lighting up like crazy about your new hotel policy and it’s using lots of electrical energy and causing much mental stress for everyone including me. As a result I will be sending you an energy surcharge and family counseling bill once things settle down a bit.

  14. Tim Dunn

    Hotels need to be held to the same full fare/fee disclosure regulations as airlines if the fares are sold on the internet.
    Either we have a unified national economic system that is joined by the internet or we are back to individual fiefdoms.

  15. Another Lump

    If you can't opt out then it should be included in the rate, otherwise it's pure deceptive pricing...charging for energy is even worse than resort fees. How about a roof fee? A bed fee? It's all getting really stupid. I suggest we all book a stay there, then cancel just before deadline and send a note saying I'm cancelling because of ridiculous energy fee.

  16. Ghostrider5408

    Just another "fee" we will be forced to endure. Not sure why they just advertise a real price and let it go at that but then they wouldn't be competitive would they. More to come.

  17. LiuX

    This is great news for all those who believe in man-made climate change! Hopefully people will use less electricity and resources at the hotel and eventually these charges can be reduced or even eliminated! Start with candles in the rooms and a switch to reclaimed water for showers (preferably without using gas or electric water heaters, cold water is better for the environment).

  18. Adam L

    Le Mis already called this:

    "Charge 'em for the lice, extra for the mice
    Two percent for looking in the mirror twice
    Here a little slice, there a little cut
    Three percent for sleeping with the window shut"

  19. Max B

    I sent your article to my concierge asking for a comment. I loathe these charges. I’ve walked out of hotels for things like this. By all means they should charge what they want but that should be in the nightly rate.

    1. Andrew

      Your concierge will probably do nothing. My concierge has given up any hope of getting hotels to conform to program rules.

      Hyatt is running a dangerous game. The more full service properties that close restaurants “due to Covid”, the more they game charges and fees to not be waived, the less motivation I have to re-earn Globalist.

  20. Duncan

    In most countries the advertised price must include all fees, charges and taxes so the consumer knows the actual price. Often refer to Nth America as the plus, plus country as the advertised price has now relationship to the price you pay.

  21. AGrumpyOldMan_GA

    Just speculating, but I wonder if this is the beginning of some sort of charge to offset higher "woke"....err...."green" power. Even if this is not to cover higher expenses associated with having to get "sustainable" power, it could ultimately be leveraged as some sort of virtue signaling. I could be completely wrong, but this one raises some red flags, IMO.

    1. Andrew

      Most of the previous environmental efforts have correlated perfectly with cost savings.

      - Get rid of Fiji water for $11 in our gift shop? Nope.
      - Get rid of individually packed toiletries? Yup.

  22. Billy STL

    The real question should be
    Does these count as base points

  23. Andrew

    Oh yay. To boot: this won’t be waived for Globalists. On top of the mostly-miss Globalist breakfast benefit. Methinks the end is neigh for my Hyatt loyalty.

  24. Rick

    It really is nonsense this creeping practice of an energy surcharge in USA. Major hotel chains need to take action to ban it, combined with the same approach to banning by state or Federal authorities.

    May I add add my dismay at the new website.
    Home page is just such a mess of colour and advertisements its not worth looking at. Blog is not much better, at least you can see the recent posts in order. However again spoilt by intrusive advertisements.

  25. Ken Schneiderman

    The new design is utter crap. Like this 3.5% fee

  26. Josh F

    I think the hidden fees, surcharges and processing charges are just another way of screwing over the consumer! I was recently at a restaurant in Southern California called the Claim Jumper, where they added a 3% surcharge so they could "continue offering the service and quality of food" currently available. Now doesn't that seem like an outrageous?
    Similar to airport "recovery" fees, whatever the f*** that might be, these fees on fees need regulated...

    I think the hidden fees, surcharges and processing charges are just another way of screwing over the consumer! I was recently at a restaurant in Southern California called the Claim Jumper, where they added a 3% surcharge so they could "continue offering the service and quality of food" currently available. Now doesn't that seem like an outrageous?
    Similar to airport "recovery" fees, whatever the f*** that might be, these fees on fees need regulated and even abolished. One who travels a lot for work, I would never stay at a hotel that charges hidden fees. Looks like I'll be taking the Hyatt portfolio of the list.

  27. treed314

    One other reason, which is a corollary to the "pull a fast one," is that government employees and government contractors (a lot more additional employees at employers big and small than you'd think) have to follow GSA maximum per diem rates in every market for the government to pay for the stay. This is only based on the rate and doesn't include taxes and fees. By increasing the fees, they can as you mentioned already,...

    One other reason, which is a corollary to the "pull a fast one," is that government employees and government contractors (a lot more additional employees at employers big and small than you'd think) have to follow GSA maximum per diem rates in every market for the government to pay for the stay. This is only based on the rate and doesn't include taxes and fees. By increasing the fees, they can as you mentioned already, increase their rate in a sneaky way and still get the government employees + contractors to choose their hotel.

  28. Allan Hoffman CTC

    Hyatt Hotels and Resorts are usually trendsetting, thus since Resort Fees have taken over as a mainstay i do forsee the foreshadowing of this "energy fee"!? Concerning it is but natural since the hotels cannot make up for rising energy costs due to COVID less food and beverage purchases and higher energy use for COViD compliance.

  29. Jon

    Excellent article! Thank you for calling out this hotel to raise awareness in the early stages of this scam. I hope people will come together to boycott hotels that do this; it is a perfect use of the growing cancel culture that helps every consumer keep money in their own pocket and discourages shady tactics. Please write more articles about this and the BS that is "resort fees" and let's get a boycott of those...

    Excellent article! Thank you for calling out this hotel to raise awareness in the early stages of this scam. I hope people will come together to boycott hotels that do this; it is a perfect use of the growing cancel culture that helps every consumer keep money in their own pocket and discourages shady tactics. Please write more articles about this and the BS that is "resort fees" and let's get a boycott of those hotels trending until they remove them. Surely there is an amount of lost revenue at which point businesses must make the decision to reverse course. We have the power, we just need to get the word out.

  30. Artur Oliveira

    Thanks for calling this out, I will be sure to avoid this place next time I'm near O'Hare.

    Not to be petty, but these surcharges aren't unbundling because they're mandatory. There could theoretically be winners and losers with true unbundling (e.g. only pay for what you use), but every single guest loses with these mandatory junk fees.

    This is just shady pricing strategy and I feel like they'll get worse before they get better (maybe...

    Thanks for calling this out, I will be sure to avoid this place next time I'm near O'Hare.

    Not to be petty, but these surcharges aren't unbundling because they're mandatory. There could theoretically be winners and losers with true unbundling (e.g. only pay for what you use), but every single guest loses with these mandatory junk fees.

    This is just shady pricing strategy and I feel like they'll get worse before they get better (maybe through mandatory "all-in" pricing like flights).

  31. LovetoFly

    So another hotel I have to avoid. It seems my list for hotels pulling crap like this is getting longer and longer.

  32. MQ

    I feel like Airlines are also coming up with some absurd fees as well. Frontier now charges a "Covid Recovery Charge" and "High Cost Airport" on a number of tickets, especially those leaving from expensive airports

  33. Michael23

    maybe this pushes me and more more for Airbnb's///

  34. BobInLA

    Hyatt Corporate will be useless -- they just let the charges stand in nearly every case. It'll be similar to Uber & Lyft and how they took a big chunk out of taxi use.. Hyatt and their various ilk will wake up one day and realize that they've nickel & dimed everyone (or just plain ripped everyone off) for years & years with charges like this one only to find that they've permanently lost customers...

    Hyatt Corporate will be useless -- they just let the charges stand in nearly every case. It'll be similar to Uber & Lyft and how they took a big chunk out of taxi use.. Hyatt and their various ilk will wake up one day and realize that they've nickel & dimed everyone (or just plain ripped everyone off) for years & years with charges like this one only to find that they've permanently lost customers who are fed up. Thus Airbnb & VRBO, etc. And it'll be too late. You can't hide resort fees at places that aren't resorts or energy fees where it's part of doing business to keep lights on without people getting angry and frustrated, no longer wanting to give you their money.

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kay_elemeno

What a coincidence, I happen to charge the hotels I stay at a 3.5% very handsome guest fee. I guess it'll come out in the wash.

David

Wow you're right, the website rollout has been a bit of a disaster.

David

I wonder why travel agents are fine with this development. Hotels might as well just charge $0 per night and have a bunch of "Employee Retention Fees", "Housekeeping Fees", "Hardware Upkeep Fees", "Property Insurance Fees" etc.

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