American hotels giving up on ancillary fees in favor of raising room rates

The past few years it was looking like hotels would follow the airline model, by charging lots of ancillary fees for everything from parking to Wi-Fi. However, it now looks like that strategy is being abandoned. Instead, many hotels are putting most of their attention into raising room rates. In 2012, room revenue was about 68% of total revenue, and 10% of profits, says Robert Mandelbaum, director of research information services at PKF Hospitality Research. “That is what they are focusing on and where they are being more aggressive,” Mandelbaum says, referring to room revenue. “If they have to make concessions, they will concede on the ancillaries.”