HotelsMag January-February 2022 | Page 11

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ADDING US $ 25-US $ 50 A NIGHT TO RATES ACROSS THE BOARD WILL MAKE IT MORE DIFFICULT TO REMAIN COMPETITIVE PRIOR TO OTHER MAJOR COMPANIES MAKING THE CHANGE ,” HE SAYS . “ BUT ONCE EVERYONE IS ONBOARD , IT WON ’ T CUT DOWN ON BOOKINGS .”
the practice myself . It would be like airlines charging you for checked baggage without telling you that you have to pay .”
However , rolling fees into rates is an unlikely scenario as it pushes the published rate higher than perhaps a competitor that does not have the resort fee , which would create too large a rate disparity … “ I think the whole process will evolve into what we see with the short-term rental rate structures of the listed rate , the resort fee , a cleaning fee ( if applicable ) and so forth ,” one hotelier says .
Another source suggests operators will take a good hard look at how much they can reduce their ‘ disclosed ’ resort fees or destination / amenity fees , and then build in the difference into the rate . “ For a Marriott or Hilton , these kinds of fees amount to millions annually . I ’ d suspect they ’ ll go for some hybrid model where they drop resort fees and find a few bucks in rate and try to soften the blow . I ’ d also assume they will push some of the pain on to service providers like
the tech companies that provide the tech and Wi-Fi support , and force their hands or switch providers .”
This change in rate structure is also expected to create a disadvantage for hotels trying to cover their cost of sales when compared to the OTAs . “ The margins have been narrowly reduced in the past few years and this has forced the hotels to reduce services to cover their rising costs ,” one operator says . “ More and more , full-service hotels are trying to behave like select-service hotels just to stay afloat .”
These fees have also served as a huge source of revenue for owners , but if the resort or facility fees continue in one form or another , one operator says , the financial impact will be minor .
FOR A MARRIOTT OR HILTON , THESE KINDS OF FEES AMOUNT TO MILLIONS ANNUALLY . I ’ D SUSPECT THEY ’ LL GO FOR SOME HYBRID MODEL WHERE THEY DROP RESORT FEES AND FIND A FEW BUCKS IN RATE AND TRY TO SOFTEN THE BLOW . I ’ D ALSO ASSUME THEY WILL PUSH SOME OF THE PAIN ON TO SERVICE PROVIDERS LIKE THE TECH COMPANIES THAT PROVIDE THE TECH AND WI-FI SUPPORT , AND FORCE THEIR HANDS OR SWITCH PROVIDERS .
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