The American Customer Satisfaction Index just released its 2023 Travel Study, which ranks airlines, hotels, car rentals, and online travel agencies on customer satisfaction.
For this report, more than 10,500 customers were interviewed via email over the past year and asked to evaluate their recent experiences with a wide variety of travel companies.
Airlines
Alaska Airlines gets the best ranking, rising 8% to an ACSI score of 81 (on a scale of 100).
American and Southwest Airlines each rose 1%, to an ASCI score of 78. United Airlines stayed steady with a 77 score, but scores dipped a bit for Delta Air Lines and Jet Blue.
As you can see from the chart below, airlines, car rental companies, and online travel agencies each made 1% gains in overall customer satisfaction, but satisfaction rose 6% for hotels in general.
Ever check out of a hotel and notice a “transient occupancy tax” on your bill?
Unfortunately for your wallet, the Biden administration’s crackdown on “junk fees” won’t do anything about it.
But unlike some of the add-ons hoteliers and booking sites charge, this common type of tax doesn’t pad corporate margins, and the projects it funds are evolving in step with the post-pandemic tourist economy.
These levies — often known generically as “bed taxes,” though they go by many names — are imposed by state, county and local governments or tourism improvement districts.
They can drive up the cost of an overnight stay at hotels, motels, bed and breakfasts, campgrounds, and short-term rentals like Airbnbs, sometimes by up to 20%.
The jurisdictions typically decide how to allocate the revenue these taxes pull in. Sometimes they supplement governments’ operating budgets; other times they’re used to finance tourism campaigns, build convention centers, support cultural programs, or hire beach lifeguards.
New Uses For Hotel Bed Taxes
But in Estes Park, Colorado, bed taxes are now subsidizing housing and childcare costs for local workers.
The mountain community, known as a base camp for adventures in Rocky Mountain National Park, voted for that move after a law Colorado enacted in March 2022 began allowing cities and counties to use hotel tax proceeds to cover housing and child care for the tourism-related workforce
In Estes Park, the decision came after advocates flagged a proliferation of second homes and short-term rentals that they said had strained affordability in the area.
Last November, the city raised its hotel bed tax to 5.5%, up from 2%, and earmarked funds from the increase — an estimated $5.3 million in 2023 — for the housing and child care initiatives, said Kara Franker, the CEO of Visit Estes Park, a local tourism group. That beefed-up bed tax now combines with town, county and state sales tax to add a cumulative 14.2% onto the cost of a nightly stay in the city, she said, helping to fund a range of public services alongside the new workforce-related initiatives.
According to Colorado tourism officials, at least 17 municipalities have imposed a new bed tax or modified an existing one over the past year, many of them putting the revenue toward new types of projects.
Similar moves are happening in tourism-heavy areas across the U.S., said John Lambeth, CEO of travel consultancy Civitas, reflecting a more expansive approach that is “more about stewardship of the destination and giving back to the community.”
Jack Johnson, chief advocacy officer for the travel industry group Destinations International, said the disruptions of the pandemic have motivated some communities to consider whether broader social and economic policies “can be tied to travel in tourism, either directly or indirectly, and therefore paid for out of the bed tax.”
Hotel taxes were first adopted in the U.S. by New York City in 1946, became commonplace nationally by the 1970s, and are what guests typically see itemized on their hotel bills today, said Elizabeth Strom, an associate professor at the University of South Florida’s school of public affairs. Public officials have long loved bed taxes because they generate easy-to-raise income from out-of-towners, not local voters.
“Every state either has such a tax at the state level or permits such a tax at the local level or both,” Strom said.
The newer breed of bed tax experiments, like those in Colorado, are being driven as much by windfalls from rebounding travel demand as by evolving civic attitudes.
Tourism revenues dipped sharply during the pandemic, but in 2023, hotel-generated state and local tax revenue — which includes bed taxes along with the other levies lodging operators contribute to government entities — is expected to reach $46.71 billion nationwide, up 13.6% from 2019, according to a study by the American Hotel and Lodging Association and Oxford Economics.
Bed taxes already account for nearly half of the hotel-generated taxes in the U.S., the AHLA said, and it expects bed taxes this year will likely exceed the $19 billion they generated in 2019.
In Florida, which has been hit by multiple hurricanes that affect beaches and islands, Broward, Collier, Lee and other counties are applying tourism revenues to rebuild and protect those travel assets, Johnson said. Bed taxes now contribute financing for dune restoration, shoreline stabilization, erosion control, and other coastal management activities, he said.
The shift has raised some concerns from the hospitality industry.
“In general, the more taxes states and cities levy on hotels, the more of a competitive disadvantage they create for local businesses, as potential hotel guests may seek out other destinations with lower tax burdens,” AHLA CEO Chip Rogers said.
As for the industry-imposed fees the Biden administration is scrutinizing, AHLA spokesperson Curt Cashour said that only 6% of hotels nationwide charge “a mandatory resort, destination or amenity fee, at an average of $26 per night,” adding that they “directly support hotel operations” like staff wages and benefits.
Cashour said the AHLA is continuing to work with authorities “to ensure that the same standards for fee display apply across the lodging booking ecosystem” so guests aren’t caught off guard.
Bed taxes may send extremely cost-conscious leisure and business travelers to lower-taxed destinations, Strom said, “but if you are a unique location, I don’t think an extra few dollars a night in taxes matters.”
“If people want to see the Space Needle,” she added, “they aren’t comparing the cost of rooms in Seattle to the cost of rooms in Portland.”
Some top tourist destinations say they aren’t worried about turning away tourists at the moment.
Hawaii, for example, is seeing a strong post-pandemic tourism recovery, even though its 13.3% state and county transient accommodation taxes combine with 4.5% excise taxes to add close to 18% to nightly hotel bills. State revenue forecasters expect Hawaii’s bed tax alone to bring in more than $785 million this year, up from $645 million last year.
Since drawing more tourists isn’t the main challenge, said Ilihia Gionson, a public affairs officer with the Hawaii Tourism Authority, the agency is using some of the funds it gets from hotel taxes to try to influence what types of visitors it attracts.
“The wheels were turning before the pandemic and accelerated during the pandemic,” he said. “We want visitors that align with our economic and community goals — who will shop at local businesses, eat in local restaurants, participate in ‘voluntourism’ and be mindful of their economic impact. So, it’s less about, ‘Come here,’ and more about, ‘Here’s who we are and what we’re about.’”
Keys for Trees
San Luis Obispo, along California’s Central Coast, is also earmarking some of its hotel tax income for projects that authorities hope will benefit the community.
Its existing transient occupancy tax supports the city’s general fund. But last year a new “Keys for Trees” program began setting aside some proceeds from the city’s tourism assessment tax — another government surcharge on hotel bills — to help plant 10,000 trees by 2035 as San Luis Obispo pursues its carbon neutral goals, said Tourism Manager Molly Cano.
The city’s business improvement district raised $1.6 million from this assessment pre-pandemic and $2.1 million in fiscal 2022, Cano said. Previously, all these funds were used to market San Luis Obispo to visitors. But now 1% of that revenue is steered toward the new program, with some $17,000 reserved for planting 35 trees this fiscal year.
“There’s no extra step to take,” Cano said, “and we think visitors will enjoy knowing that just by booking an overnight stay, they are helping to preserve the beauty of our community.”
Holiday Travelers face bad weather and bad service
A frigid arctic blast is threatening to derail holiday travel this week. But even those who reach their destinations on time may have reason to grumble: Some will have to make their own hotel beds, wipe their own in-flight tray tables and wait in lines at airport lounges — or pay more for a smoother experience.
While travel demand is roaring back, many hotels, airlines, cruise operators and airports are still racing to hire and train workers. Some companies are tightening access to perks and amenities, in a few cases by raising prices. That means the level of customer service will likely take a hit, industry experts say.
Nearly 113 million Americans are forecast to take to the roads and skies between Dec. 23 and Jan. 2, according to AAA, up 3.6 million from last year and just shy of pre-pandemic numbers. But employment levels in the leisure and hospitality sector are still 5.8% lower than in February 2020, when the industry employed around 980,000 more people than it did last month, federal data shows.
“Everyone is jumping back onto the travel wagon again, but in some cases, these wagon wheels may still be a bit wobbly,” said Corey Green, a travel adviser with AAA in Wilmington, Delaware.
Flying?
The good news: While holiday airfares remain high, ticket prices are inching down and the labor crunch is easing.
“After a summer with numerous problems with flight delays and cancellations, U.S. airlines have been successful in hiring a lot more pilots and flight attendants, and getting them trained,” said Henry Harteveldt, a travel industry analyst at Atmosphere Research Group. “They’ve also been hiring people to work at airports, reservation offices and elsewhere. So I anticipate that from the airline side, we’ll have a good Christmas and New Year’s season.”
What to expect at airports
But some fliers say the customer experience remains rocky.
“Since summer, when I’ve flown between the U.S. and the U.K., lounges have been so packed that it is sometimes impossible to find a seat,” said Rachel Franklin, a geography professor based in the United Kingdom. She added that she’s seen “used dishes accumulate in teetering piles on tables, so you can’t sit there either.”
To address overcrowding, some airlines are tightening lounge access and limiting or eliminating day passes.
Starting Jan. 1, Delta Air Lines’ Sky Club memberships will be available only to “Silver Medallion” and other elite-level fliers, and fees are going up. By Feb. 2, members traveling in basic economy will be cut off from lounges unless they pay with certain cards.
Alaska Airlines will also raise lounge membership fees starting next year. And beginning Feb. 15, the carrier will grant complimentary lounge access only to passengers with certain long-distance, first-class tickets.
Delta, which expects its 2023 earnings to nearly double thanks to strong demand, pointed to an earlier statement by Dwight James, senior vice president, customer engagement and loyalty: “While we’re thrilled to see so many customers enjoy the fruits of our teams’ hard work, our goal now is to balance the popularity of the Clubs with the premium service and atmosphere for which they were designed — and that our guests deserve.”
Seattle-based Alaska said its lounges “have become so popular during certain times of the day, we’re making adjustments to our complimentary First Class access policy to allow for a bit more elbow room.”
For now, Harteveldt said, “you don’t want to plunk money out in advance for a lounge pass only to be told, ‘Sorry, we’re not accepting them.’ Instead, wait to buy a lounge pass until you’re at the airport and are confident you will be able to enter.”
Many airport employees say they’re overworked and their teams are understaffed, making it hard to maintain quality service for so many passengers.
Earlier this month, Service Employees International Union members working as baggage handlers, cabin cleaners, ramp agents, wheelchair attendants and janitors demonstrated at 15 U.S. airports, calling for higher pay and better conditions. “We’re so short-staffed, they make it almost impossible for you to take a sick day,”Omar Rodriguez, a ramp agent and cabin cleaner for contractor Swissport USA at New York City’s LaGuardia Airport,saidin a union statement. “We get blamed for delays, but we’re only given a few minutes to clean and don’t have enough people to do the work.”
Swissport said it “denies any unfair labor practices” and “fully complies with applicable regulations and provides competitive wages and benefits.”
Inside terminals, concessions operators are also struggling to hire and keep staff at shops, restaurants and bars. So passengers should be prepared for longer lines, limited operating hours and some commercial spaces that have yet to reopen.
Checking into a hotel?
Hotel guests may also find some service reductions still in place.
Many properties that suspended daily housekeeping to maintain social distancing have been slow to restore that amenity, said Jan Freitag, the national director of hospitality analytics for CoStar Group, a commercial real estate research firm. “They say, ‘Of course, we’re here if you need a towel or something,’ but they will not automatically clean your room.”
Some labor groups say hotel operators are taking advantage of pandemic policies to make long-term cost cuts, and they encourage guests to demand housekeeping during their stays — especially since many are now costlier. Room rates were up 15% in November this year over November 2019, according to Freitag. “That’s just the national average,” he said. “If you are in a 4- or 5-star property or resort, you are paying much higher rates, in some instances 30% more than in 2019.”
At most 2- and 3-star properties, he said, guests generally must request housekeeping, and while pricier rooms are more likely to include it, “some high-end properties may not have enough staff to offer housekeeping either.”
There are currently more than 100, 000 open hotel jobs nationwide, including nearly 20,000 housekeeping roles, according to the American Hotel and Lodging Association. “Recruiting workers continues to be the top challenge for many hoteliers,” said Chip Rogers, the trade group’s CEO.
Going on a holiday cruise?
One potential bright spot can be found at sea: During the summer, several cruise lines had to cancel voyages due to staffing shortages, but major disruptions have been largely resolved.
“It’s highly unlikely your holiday cruise will be canceled due to lack of staffing,” said Colleen McDaniel, editor-in-chief of Cruise Critic, a travel site run by Tripadvisor. “But just like so many other industries, you might notice some staffing or supply chain-related effects onboard.”
That could affect service quality a bit. Many cruise lines are adding fresh staff en masse, and a lot of those crew members are new to the industry, she said, “so training is ongoing and is critical to the onboard experience.”
Bottom line
Passengers across the board should “be prepared to pay a little more than usual if you want the vacation of your dreams,” Green said. Or be flexible with timing to avoid the busiest periods most prone to service snags.
“This year, I moved my annual holiday travel to earlier in December,” said Abby Rhinehart, an educational researcher in Tucson, Arizona. “It was a little strange to celebrate so early in the month, but I think it was worth it to avoid all the stress.”
We’re writing this post from a hotel where we’re paying more than we’d planned to and getting way less comfort and service than we expect.
And that seems to be the travel experience many others are having in this easing-out-of-the-pandemic season.
According to the recent J.D. Power 2022 North America Hotel Guest Satisfaction Index Study, while demand for hotel rooms is on the rise, and prices for hotel rooms are way up, there is no improvement in amenities or service.
The study found that overall hotel guest satisfaction declines 8 points – on a 1,000-point scale – from 2021, driven primarily by dissatisfaction with cost and fees, and guest rooms.
“During the period of the study—June 2021 through May 2022—the average daily rate for branded hotels has risen 34.8%,” said Andrea Stokes, hospitality practice lead at J.D. Power. “Many hotel owners and operators are using this post-pandemic surge in travel to get back on a steady financial footing, yet they held back on investing in upgrades and improvements during the pandemic.
Here are some other findings from the 2022 study:
Does that sound like what you’re experiencing with your recent hotel stays?
• The single biggest factor driving the decline in overall satisfaction is hotel cost and fees. • While hotels still get relatively high satisfaction scores for guest room cleanliness, scores for décor and furnishings, in-room amenities, and quality of bathrooms have declined from a year ago. • More guests are paying for internet access. • Fewer staff interactions: frontline hotel staff are spread thinner this year due to the industry labor shortage.
Image courtesy Joel Ross – Room 28
Where to stay?
Hoping to stack the deck in terms of satisfaction with your next hotel stay?
Here are the hotel brands that rank highest in the J.D. Power study for guest satisfaction in their respective segments:
Luxury: The Ritz-Carlton (885)(for a second consecutive year) Upper Upscale: Hard Rock Hotels (883) (for a second consecutive year) Upscale: Hilton Garden Inn (868)
Upscale Extended Stay: Hyatt House (857) Upper Midscale: Drury Hotels (877) (for the 17th consecutive year)
[This is a story we wrote for, and which first appeared on NBC Newsin a slightly different form]
Courtesy Home2 Suites by Hilton
Extended Hotels are having a moment
As travel picks up and the phenomenon of remote work continues to blur the lines between business and leisure, extended-stay hotels are having a moment.
Last year, the average occupancy rate for extended-stay properties climbed to 73% percent, compared to just 56 percent for hotels in general, according to data from STR, a research firm. Now, big hotel operators and real estate developers are investing heavily to make that moment last.
“There is a definite blurring of business and leisure that includes longer stays since employees can work from anywhere,” says Daniel Finkel, chief commercial officer for TripActions, a corporate travel service.
That blur has turned Airbnb and some other vacation rental companies into money-minting machines. During an earnings call last week, Airbnb CEO Brian Chesky told investors that 2021 was the company’s “best year in history.” He also described the changing landscape: Over the past two years, the average stay increased by 15 percent. Stays of a week or more now represent half of all nights booked, and long-term stays of 28 nights, or more, have become Airbnb’s fastest-growing type of booking.
The hotel industry has heard the message
Although extended-stay hotels still account for less than 10 percent of the total lodging market, their share has been growing, according to STR. And nearly every major hotel brand is adding, or has announced plans to add, properties that cater to travelers looking to stay awhile. Chains such as Extended Stay America, Homewood Suites by Hilton, and Residence Inn by Marriott, for instance, are light on amenities, but typically offer more space, full kitchens or kitchenettes, and lower rates than full-service hotels.
Wyndham Hotels & Resorts, which already operates the mid-priced Hawthorn Suites chain, plans to launch its first economy-level, extended-stay brand this spring. CEO Geoff Ballotti announced the launch last week during an earnings call with investors, where he described the extended-stay market as “recession and pandemic proof.”
“I see it (extended stay) as one of the fastest-growing and one of the most exciting segments in the hospitality business,” said Kevin Davis, Americas CEO for the hotels and hospitality division of JLL, a commercial real estate service company. “The sector has attracted a tremendous amount of investor interest.”
In January, real estate heavyweights, Blackstone Inc. and Starwood Capital Group, which includes nearly a dozen hotels brands, together ponied up $1.5 billion for more than 100 properties from WoodSpring Suites. That deal came just a couple of months after the pair paid more than $6 billion for Extended Stay America, with more than 650 locations across the country.
What’s the attraction?
What’s the attraction? For 2019, the last ‘normal’ year for the industry, the average profitability for all full-service U.S. hotels was 27 percent, according to Carter Wilson, senior vice president of consulting for STR. “But it is not uncommon to see extended-stay properties putting 40 percent to 50 percent to the bottom line,” he said, even though prices are low.
A five-night stay at Extended Stay in Minneapolis, for instance, starts at about $75 a night. Marriott’s Residence Inn, one of the higher-priced, extended-stay options, costs $111 a night.
But fewer amenities and longer stays mean operating costs are lower, too. Housekeeping is typically offered once a week, rather than every day. Room service, if available at all, is limited. No one is restocking the minibar or replacing the coffee pods, and with fewer guests coming and going, the front desk requires fewer workers.
Peter Caputo, a senior hospitality executive with Deloitte, thinks the luxury equation could change, as the market expands, and new players come in. Even full-service hotels have been seeing more travelers who stay for a week. “People are used to having more space at home and now that they’re back traveling, road warriors will want more space and more upscale amenities wherever they are staying. Much like boutique hotels might offer,” Caputo said.
WhyHotel, for instance, turns apartments that are yet to be leased into temporary hotel rooms available for extended stays. The start-up has properties in a handful of cities, including Nashville, Tennessee, where a two-week stay starts at $160 per night for a studio. Prices are higher in New York City and Miami.
Pets getting the extended stay treatment too
Some hotel operators are looking to cash in by appealing to the needs of a different type of traveler altogether: one that often has four legs. Hilton WorldWide Holdings, for instance, recently made its extended-stay properties 100 percent pet-friendly. Pet fees at the company’s Homewood Suites and Home2 Suites start at $50 per stay. Hilton has also partnered with the pet food giant Mars Petcare to offer on-call pet experts who can answer guests’ questions on pet health, wellness, and behavior.
That could be a selling point for millions of pet owners, who have yet to road-test the new companions who entered their lives during the pandemic.
