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Guests Continue to be Blindsided by
Hotel Telephone Surcharges
By Doug Bedell, The Dallas Morning News
Knight Ridder/Tribune Business News 

May 28--Martin Halper got his lesson in hotel telephone surcharges like most travelers do � the hard way. 

While enjoying a stay at Atlanta's Westin Peachtree Plaza, he made a 22-minute, direct-dial call to Maryland after 10 p.m. 

The rate couldn't be too bad, he thought. After hanging up, he decided to check his bill on the television readout. 

What he saw made his jaw drop. 

Those 22 minutes cost him $41.56. And the front-desk attendant insisted that the billing was correct. All direct-dial long-distance calls, he explained, are billed as if they were operator-assisted at AT&T Corp.'s maximum rate. The hotel then adds a connection charge of $1.50 and a $1.50-per-minute surcharge. 

"Based on this experience, I will attempt to never again stay at any Starwood property," Mr. Halper wrote the hotel manager, noting that there was no rate card in his room. Even after receiving a partial refund from the hotel, Mr. Halper was so upset that he posted a narrative of his experience and all correspondence from the hotel chain on an Internet news group on travel. 

There it resides with dozens of other allegations of hotel phone charge atrocities. Joining Mr. Halper is a U.S. Commerce Department employee who says he was billed $5.63 each for making 21 local calls from his Hyatt hotel room, even though no one ever answered at the other end. Then there's the laptop-toting Internet addict who dialed a local AOL access number and stayed online three hours, only to learn his hotel was charging him 10 cents for every minute beyond 20. 

Christopher Elliott has heard it all. As one of the nation's leading business travel experts, Mr. Elliott says there is a simple solution to sticker shock in the unregulated � sometimes sneaky � world of hotel telephone surcharges. 

"These days, if it were me, I would never even pick up the hotel phone," says the Key Largo-based travel editor for Entrepreneur Magazine and ombudsman for National Geographic Traveler. 

In the last three years, falling occupancies � exacerbated by the Sept. 11 travel scare � have forced hotels to search out new ways to shore up their bottom lines. Telephone surcharges have proven effective, Mr. Elliott says, because business travelers rarely contest them. 

"I can't blame the hotels," says Mr. Elliott. "I think they have a right to make a profit. It's just the way they're going about doing it is not right. They're using technology to find a way to squeeze a little bit more money out of the traveler." 

Responding to Mr. Halper's complaint, a Starwood spokesman wrote: "Our pricing structure is a combination of our overall telephone charges and is derived from the telephone systems and processing. While we do not actively track other properties' prices, I believe we are in a competitive position." 

Hospitality industry consultant Robert Mandelbaum of Atlanta says hotels this year will make 2.2 percent of their total revenue from guests' use of telephones. On average, hotels make about 50 cents for every dollar they charge for telephone connections, according to Mr. Mandelbaum's research for PKF Consulting. While telephone revenue remains a relatively minor part of their income, it is a sector that has been in decline as consumers take advantage of alternatives, Mr. Mandelbaum says. 

Before 1990, Mr. Mandelbaum says, most hotel telephone systems were a break-even proposition. Hotels began experimenting with surcharges to create new revenue streams, then began adjusting surcharges to reflect their guests' increased use of calling cards and pay phones. 

Mobile business and leisure travelers consistently rank hotel telephone surcharges in the top 10 on-the-road irritants in annual surveys by American Express. And a recent poll by the FrequentFlyer.oag.com showed that more than 66 percent of responding members now use their cellphones to avoid in-room telephone charges completely. 

As cellphone use increased, some hotel chains have attempted to regain those lost profits by adding surcharges to local and 800-number calls. For example, most Hyatt hotels are charging at least 50 cents for making "toll-free" calls, says Mr. Elliott. 

And, because guests are increasingly logging onto the Internet for long durations, some chains are now adding hefty surcharges for long connection times. At Courtyard by Marriott hotels, says Mr. Elliott, guests are charged 10 cents a minute or more for calls beyond 30 minutes. Company-owned Sheratons, Westins and Four Points, all Starwood Hotels & Resorts Worldwide brands, are charging 10 cents a minute for toll-free calls longer than 60 minutes, he says. 

Best bets for the lowest telephone rates are usually extended-stay hotels such as Residence Inns, says Mr. Elliott. 

But no matter where a traveler chooses to stay, it is a good idea to make an extra effort to read in-room rate cards completely before dialing out, he says. 

No federal rules govern disclosure of telephone surcharges, although most reputable hotels include a detailed rate card somewhere in their in-room literature, says Mr. Elliott. "What really upsets people is when the hotel isn't up front about it all," he says. "Maybe they have a small reference to surcharges in their little guest directories, but it often is very hard to find." 

Hotel spokesmen contend surcharges for longer calls are necessary because Internet connections are tying up their lines. But Mr. Elliott believes that's a red herring. 

"If that were the case, you should also charge people for the incoming calls because they take up as much bandwidth as the outgoing calls," Mr. Elliott says. 

With the Internet craze of the late 1990s, many hotels scrambled to add high-speed data lines to their guest rooms, often giving away the service as an added attraction. But today guests can expect to pay for those connections. 

At the Melrose Hotel of Dallas, for example, charges for accessing an in-room T1 line are $8.95 for each 24-hour cycle. 

Billing begins, says manager Ivan Osorio, with the first login. 

Since Sept. 11, Mr. Osorio says, guest use of the high-speed connection has dropped about 60 percent. "My personal explanation is that with the state of the economy today, companies are looking for savings all over," he says. "Most people are checking their e-mail messages today with the slower connection on the dataport." 

When blindsided by hotel telephone surcharges, guests have some options. Confront the front desk personnel first, then ask for a manager if no satisfaction is obtained, Mr. Elliott advises. After that, writing a letter to hotel chain managers often proves worth the time, he says. 

"But in general, once you're out of the hotel it's very hard to get any action," Mr. Elliott says. 

There is no national oversight body for most billing disputes, but the American Hotel and Motel Association (www.ahma.com) does have some influence in mediating disputes once you've exhausted other measures. The Federal Communications Commission (www.fcc.gov) offers a free brochure on hotel telephone charges called "Know The Phone Facts Before You Hit The Road." 

You can also air your grievance on complaint sites such as eComplaints.com, Passengerrights.com and Planetfeedback.com, says Mr. Elliott. That may make you feel better about your ordeal, but it probably won't prompt any action, he says. 

Finally, says Mr. Elliott, membership in frequent-stay clubs offered by major chains does have its privileges. A traveler flashing a Hilton Diamond Club membership card often gets more attention than a protesting guest without one. 

"Make sure they know that you're a valued customer, and if they do something like this you're going to take your business elsewhere," says Mr. Elliott. "If they see that you've spent 100 nights at their properties last year, they're going to make these things disappear." 

AVOIDING LARGE HOTEL TELEPHONE CHARGES 

Use your cellphone to make outgoing calls. 

Depending on roaming fees and hotel long-distance rates, you can often save. 

Don't use hotel phones for Internet connections. 

Consider purchasing a cellphone modem for Internet connections. Many hotels now add surcharges for calls that last more than 30 minutes or an hour. 

Be careful about connecting for long periods. 

Know the hotel's rates. Hotels often keep rate cards with these fees at the front desk and by the phone in each room. Make sure to read over the rates before making any calls and ask the front desk any questions you may have. 

Use a calling card. Some hotels don't have a surcharge if the guest uses a calling card to make outside calls. Check with the hotel to see what their policy is and to make sure you're not subject to a connection fee. 

Use toll-free numbers. Policies differ from hotel to hotel, but toll-free numbers are not always subject to a surcharge. Again, check with the front desk. 

Group calling card calls. Most calling cards allow you to let the other party hang up while you are still on the phone. Once this happens, press the pound sign (#). This will usually keep you connected, and you won't be charged an additional connection fee. 

Use five-digit codes. Many calling card carriers have a five-digit code that may be entered before dialing the 800 number of the carrier. Check with your calling card carrier to see if your carrier has such a code. 

Use prepaid calling cards. Although you are often subject to a connection fee, the per-minute rate for calling long-distance will come from your prepaid card rather than being charged to your bill. 

Watch for hidden charges. Some hotels are charging for uncompleted calls at the same rate they charge for completed calls. 

SOURCES: Dallas Morning News research; Christopher Elliott, consumer advocate and travel industry critic 

-----To see more of The Dallas Morning News, or to subscribe to the newspaper, go to http://www.dallasnews.com. 

(c) 2002, The Dallas Morning News. Distributed by Knight Ridder/Tribune Business News. T, HOT, AOL, MAR, 


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