17
Jun
2009

How much revenue have airlines and hotels really been collecting in fees and surcharges? Scott McCartney at the Wall Street Journal has broken out the green eyeshade and the calculator. In a blog post and a separate newspaper column, he offers up some totals:

The U.S. airline industry collected $566.3 million in baggage fees in the first quarter, according to the U.S. Department of Transportation. That was up 13.6% from the fourth quarter, and more than four times what was collected in the first three months of 2008.

US Airways showed the most impressive gains:

US Airways stands out as a heavy bag fee collector at $94.2 million, up 1,160% from the same period of 2008. US Airways collected more in baggage fees than United Airlines or Continental Airlines, two larger airlines but with more elite-level fliers and international passengers who escaped baggage tolls.

To be fair, a huge increase on a percentage basis like that is not hard to do when fees are new… Those growth rates aren’t sustainable, unless US Airways starts charging $150 per bag next year, and $900 the next.

Those stats also don’t take all fees into account, of course. (Coffee and soda fee, anyone?)

And what about the hotels? Bjorn Hansen helps McCartney out on that front:

Bjorn Hanson, associate professor at New York University’s Tisch Center for Hospitality, estimates that hotel fees and surcharges before state and local taxes will total $1.65 billion this year — that’s more than airlines have collected in baggage fees over the past four quarters reported by the Department of Transportation. Still, the hotel-fee haul will be down 5.7% from 2008 because of the occupancy decline.

Those fees include everything from resort fees to valet parking, so it’s not an apples-to-apples comparison with the airlines.

For those interested, the Bureau of Economic Research has more information on the declining first quarter travel spend numbers. Overall spending is down an annualized rate of 5.9% over last year.

Categorized in: airlines, hotels
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