COVID-19 surcharges are here, and may spread to travel

May 23, 2020

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

The cost of doing business is going up in a COVID-19 world thanks to everything from additional PPE required to a meat shortage raising food prices.

The most notable example so far is a Japanese Steakhouse and Sushi Lounge in southern Missouri that added a COVID-19 surcharge to a receipt, which was promptly shared on Twitter:

Dentist offices are adding $10 surcharges to visits and hair salons have started adding a $3 sanitation charge. While its reasonable to expect the cost of business to go up, the practice of nickel-and-diming American consumers has never been a popular method with the public to raise prices. Much like resort fees, consumers would much rather see the entire cost of a good or service up front so they can make an informed decision about whether they are willing to pay.

Earlier this week, Gary Leff reported a third-party moderator in the Hyatt internal ‘influencers’ community asked for feedback on Hyatt instituting a COVID-19 surcharge on hotel stays. Hyatt has since said the moderator was not instructed to ask about that and “does not need a forum to confirm now is not the right time to institute new fees like this.” Notice the statement doesn’t say Hyatt won’t do it, but now is not the right time to do it.

The conversation about COVID-19 surcharges has likely already occurred at every major hotel and airline. My fear is we’d have another 9/11 fee: the $5.60 which is added to every one-way flight you book that is never going to go away and is simply passed on to consumers by the airlines.

While airlines are legally forced to show the entire price of a ticket up front, hotels are not and would likely not include any COVID-19 surcharges in advertised room rates.

Give all-in pricing

Airlines and hotels that need to raise prices because of what is required to garner supplies, clean or keep customers safe should simply increase their upfront prices:

  • Consumers are used to dynamic pricing in the travel industry and won’t recognize slight price increases to airfare or hotel rates.
  • Consumers deserve the prices advertised to be fair, transparent and all-inclusive so they can make accurate comparisons between providers.
  • Hotels and airlines need consumers to trust them and an additional fee won’t increase that trust, nor will bad press about the worst COVID-19 surcharge offenders that will undoubtedly come.
  • Opaquely increasing prices when your biggest problem right now is demand won’t stimulate more customers.
  • Requiring a COVID-19 surcharge suggests sanitation and keeping customers safe is only included in a product if I’m willing to pay an additional, not-advertised fee.
  • There are already multiple attorneys general investigating hotels for deceptive prices by charging resort fees and the momentum to pass legislation to outlaw these is ramping up year after year. Do hotels really want to fight additional legal challenges right now?

Bottom line

One hotel will be the first to think adding an additional fee and not including it in the advertised room rate is a good idea. Every hotel chain will watch to see how that is received, which is why consumers need to swiftly and loudly reject the idea and continue to demand fair and upfront pricing inclusive of an entire good or service. I’m empathetic to businesses with increased costs and am willing to pay a higher upfront, inclusive price.

Featured image by Igor Vershinksy / Getty Images.

Chase Sapphire Preferred® Card

WELCOME OFFER: 80,000 Points


CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners

*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.

Apply Now
More Things to Know
  • Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 when you redeem through Chase Ultimate Rewards®. Plus earn up to $50 in statement credits towards grocery store purchases within your first year of account opening.
  • Earn 2X points on dining including eligible delivery services, takeout and dining out and travel. Plus, earn 1 point per dollar spent on all other purchases.
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,000 toward travel.
  • With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
  • Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for a minimum of one year with DashPass, DoorDash's subscription service. Activate by 12/31/21.
  • Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
  • Get up to $60 back on an eligible Peloton Digital or All-Access Membership through 12/31/2021, and get full access to their workout library through the Peloton app, including cardio, running, strength, yoga, and more. Take classes using a phone, tablet, or TV. No fitness equipment is required.
Regular APR
15.99%-22.99% Variable
Annual Fee
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.