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User Fees vs. Taxes: Which do you hate more?

User Fees are everywhere these days. 

User Fees are amounts paid to a facility owner or service provider as a necessary condition for using their facility or service. User Fees are technically optional and thus, avoidable, but are often applied to services that most people would consider essential, like taking luggage on your vacation.  Taxes, on the other hand, are compulsory financial charges or levies imposed by a government. The failure to pay taxes is punishable by law. The failure to pay User Fees results in inconvenience, not jail time.

Some industries, like credit cards, airlines, and automotive, are notorious for embracing User Fees.  In the fallout from the COVID-19 pandemic, businesses are experimenting with new User Fees where they’ve not been the custom historically. The practice is expanding into new markets and novel applications.  This spring, MCR Hotels, announced that they were piloting a program in some of their hotels to charge User Fees for amenities, like gym admittance, early check-in and late check-out, that were formerly free. The announcement generated significant attention within the industry from press and peers from service providers like CWT Sato and Vindow. 

With hotels continuing to get hammered by fallout from the COVID-19 pandemic, service providers are looking for creative ways to generate more revenue while keeping prices competitive. The question is whether new User Fees will go generally unnoticed by the public or will the increasingly dubious, and expensive, practice finally begin to raise eyebrows?

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