Hotel energy surcharges, which made a limited debut out West in the land of rolling blackouts and soaring utility bills this spring, are now in wide release across the country. Maybe too wide of a release.
The unexpected extras are affecting frequent travelers in general and travelers who use technology, specifically. People like Bruce Robin, a Honolulu telecommunications executive who recently found a $3 per day energy surcharge on his hotel bill at New York’s Doubletree Suites.
“The hotel did not disclose the fee at the time of booking nor in any follow-up confirmations,” he complains. It divulged the energy surcharge only later, in a note in the room tucked into all the other advertising clutter left on his desk.
Never mind the fact that there’s no energy crisis in Manhattan. To Robin and other frequent travelers, the surcharges look like an ill-conceived effort to pad a property’s bottom line and punish tech-dependent travelers.
On the one hand, you can’t blame the Doubletree Suites – or any of the thousands of other hotels that have adopted energy surcharges – for the move. This could be the worst year in at least a decade for the lodging industry. PricewaterhouseCoopers predicts that revenue per available room fell by one percent during the second quarter. If that proves to be true, then it would be the biggest slide since the third quarter of 1991. In other words, the lodging industry needs all of the revenue it can get.
Could be, but that’s not the reason for the surcharges, insists Kathy Shepard, a spokeswoman for Hilton. Her chain implemented a $3 per night energy fee in properties that it owned and managed in a total of 14 markets – mostly in Hilton, Doubletree and Embassy Suites hotels. “After careful evaluation it was determined that energy costs had gone up by an aggregate minimum of 30 percent,” she explains. “The $3 is applied directly to expenses. When the expenses go down, we’re going to drop the charge.”
What’s more, she notes that Hilton has gone out of its way to tell customers about the additional fees. “We let people know if they book on the Internet, if they go through a travel agent, and we tell them when they check in. There’s ample notification,” she says.
But on the other hand, the extras are bringing in new revenue. In properties not owned and managed by Hilton, energy surcharges can be higher, notification can be nonexistent, and there is no assurance that every penny will be applied to expenses. Plus, there’s no commitment to drop the surcharges if energy prices fall. And here’s an interesting twist: at Hilton ’s budget and mid-priced brands, such as Hampton Inn and Hilton Garden Inn, there are no uniform energy surcharges (Marriott does the same thing). Does that mean that energy is somehow more expensive at full-service hotels?
Maybe, says Robert Mandelbaum, the director of research information services at PKF Consulting in Atlanta. “The energy surcharge is there because the hotel is incurring the additional expense, and the expense could be slightly higher at a full-service hotel,” he says. Enough to warrant a $3 or more surcharge per day? Probably not.
Mandelbaum believes hotels are doing two things: First, they’re discounting rates in order to lure customers back; and second, they’re adding lots of new surcharges such as the energy fee, in order to make up for lost revenue. “It adds to the bottom line,” he told me. “If they can get away with it, they will.”
Sue Cathcart, a Dallas project manager for a healthcare organization, thinks that’s the wrong approach. “I believe the hotels should be upfront with their guests. If they need to increase their rates to improve their revenue picture, then they should simply do that,” she says. “Then the consumer who is shopping for hotel rates will be able to compare apples to apples.”
It isn’t just the way in which the energy extras have been implemented, but also the kind of travelers who are targeted by the surcharges. “This is affecting business travelers, without a doubt,” says Benjamyn Damazer, a traveler based in Crowland, England. “Hotels assume that all business travelers have no regard for the cost or charges and that these will be recovered from the firm.”
I’d be willing to take it one step further. This represents a figurative slap in the face of guests who use technology – laptops, cell phones and personal digital assistants – because it is, in effect, penalizing them for their power use. The implied message is: stop plugging all of your energy-wasting gadgets into our sockets; otherwise we’ll raise room rates (without telling you).
Even though these fees may be inappropriate and unwarranted, they’re not arbitrary. Ron Miller, a writer based in Amherst, Mass., got socked by a $2.77 per night energy surcharge at the Radisson in Burlington, Vermont, last weekend. “Mind you, there seemed to be no attempt to save energy such as using energy-saving light bulbs or having sensors that turn lights off when you leave,” he remembers. But when he complained about the fee, the hotel removed it “without a fuss.”
That’s really the bottom line about the energy fees. They may be maddening, but they’re easy to eliminate. Even hotel managers readily admit that if the fees upset a guest, then it will strike them from the bill. Better to give up a little pocket change than to lose a customer, they figure.
Something to remember next time you check out of your hotel.
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