Taking the Sting Out of Fees and Surcharges

By Vanessa Horwell Founder & Chief Visibility Officer, ThinkInk & TravelInk'd | July 31, 2011

Due to the recession-driven deep discounting tactics practiced over the past few years, hotels are scrambling to implement revenue management strategies that focus on new ancillary revenues. While such strategies have proven to be effective, they also have a tendency, if not implemented through smart tactics, to be met with guest revolt. All too often, guests feel "nickel and dimed" by added fees, surcharges and gratuities unceremoniously added to their bill at checkout time.

In order to avoid losing guests-thus losing the increased revenue that these fees and service charges were designed to create-you, the hotelier, must find ways to introduce the new fees and surcharges to guests in a way that will make them more palatable.

This article will examine several common types of fees and surcharges and will provide tactical recommendations on how to introduce them to guests without causing upset or losing out on future bookings.

Gratuity & Service Fees

These service fees go toward covering the costs of staff, from bellhops, to valets, to housekeeping personnel.

Guests' feelings toward gratuity fees can be both positive and negative; while these fees are generally more acceptable to customers because they assume that the fee is passed along directly to the hotel's employees (not just into "corporate coffers"), guests also feel that gratuity fees should be performance-based. By making these fees mandatory, guests who feel that service was not up to par will be unhappy. Of course, if service is below average, then the guest has a legitimate complaint, and management, regardless of its ancillary fee structure, should address the underlying issue of poor service.

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Social Media: Getting Personal

There Social media platforms have revolutionized the hotel industry. Popular sites such as Facebook, Twitter, Pinterest, Instagram, Snapchat, YouTube and Tumblr now account for 2.3 billion active users, and this phenomenon has forever transformed how businesses interact with consumers. Given that social media allows for two-way communication between businesses and consumers, the emphasis of any marketing strategy must be to positively and personally engage the customer, and there are innumerable ways to accomplish that goal. One popular strategy is to encourage hotel guests to create their own personal content - typically videos and photos -which can be shared via their personal social media networks, reaching a sizeable audience. In addition, geo-locational tags and brand hashtags can be embedded in such posts which allow them to be found via metadata searches, substantially enlarging their scope. Influencer marketing is another prevalent social media strategy. Some hotels are paying popular social media stars and bloggers to endorse their brand on social media platforms. These kinds of endorsements generally elicit a strong response because the influencers are perceived as being trustworthy by their followers, and because an influencer's followers are likely to share similar psychographic and demographic traits. Travel review sites have also become vitally important in reputation management. Travelers consistently use social media to express pleasure or frustration about their guest experiences, so it is essential that every review be attended to personally. Assuming the responsibility to address and correct customer service concerns quickly is a way to mitigate complaints and to build brand loyalty. Plus, whether reviews are favorable or unfavorable, they are a vital source of information to managers about a hotel's operational performance.  The February Hotel Business Review will document what some hotels are doing to effectively incorporate social media strategies into their businesses.