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Tuesday, April 10, 2001

Heat, Lights Extra on Hotel Bill

By Rosalie Rayburn Journal Staff Writer Albuquerque's Crowne Plaza Pyramid has introduced an energy surcharge of $2.50 per room per night to offset skyrocketing energy costs. Dozens of other New Mexico hotels are thinking about doing the same. "It's certainly not something we enjoy doing, but we had to do something to keep the bottom line from eroding," said Jerry Jensen, director of sales for the Crowne Plaza Pyramid. The hotel's owners, the John Q. Hammons Hotel Co. of Springfield, Mo., decided to introduce a temporary surcharge instead of increasing room rates. The Crowne Plaza added the charge in mid-March. The situation will be reviewed monthly and the charge will be removed if energy costs drop, Jensen said.

Many other hotels across the state are considering such a charge but haven't put it in place yet, said Art Bouffard, executive vice president of the New Mexico Hotel and Motel Association. "I think our industry has been hit hardest. With the dramatic increase in utility costs, it (a surcharge) may come to pass in the future," Bouffard said.

Santa Fe's Eldorado Hotel, with 219 guest rooms, has seen gas costs triple from last winter. Randy Randall, the hotel's general manager, said natural gas costs in January and February this year were $33,400. For the same months last year, the total was $13,200. "Clearly, if we determined other people were charging this charge, we might consider it," Randall said. Marriott International Inc. is one of several large hotel chains that has decided to introduce an energy surcharge at its West Coast locations.

But Albuquerque's Marriott hotel on Louisiana has not adopted it. "We don't see it in the near future, but we don't rule it out," said Ted Duvall, the hotel's director of marketing. Ocean Properties Hotels and Resorts, which owns Albuquerque's Hilton, Courtyard by Marriott and Fairfield by Marriott hotels, also is holding off for now. Todd Walters, general manager of the Hilton, said it had been doubly hit by the downturn in the economy and higher energy. "We are taking a creative approach to cutting costs by shutting down wings and floors," Walters said. The measures don't hurt clients in the pocketbook, he said, but they help to reduce energy costs.

The Eldorado in Santa Fe has reduced heating in unoccupied rooms. "But we have to be careful not to take away from the service aspect of the hotel," said Randall, adding that people expect heat in their rooms "whether they're in a $50-a-night hotel or mine." Rooms at the Eldorado cost between $149 and $299 per night. The New Mexico Hotel and Motel Association is trying to reach a deal with several energy companies to minimize natural gas price volatility, Bouffard said.

The association has 387 members statewide representing everything from mom-and-pop businesses to the Hyatt Regency hotel in Albuquerque, Bouffard said. The New Mexico restaurant industry also has been hard hit by higher energy costs. "In our industry we get huge fluctuations. Iceberg lettuce may go from 20 cents to $3 and you take it off the menu. With this energy thing, you can't take guacamole off the menu," said Maurice Zeck, executive vice president of the New Mexico Restaurant Association Inc..

Higher energy costs have driven up transportation and refrigeration costs, impacting wholesale food prices. But Zeck said it was hard for restaurants to pass costs on to customers without hurting business. "This is a spiraling thing that hasn't hit the restaurant menus yet," Zeck said.

Federal Express added a 4 percent surcharge last year because of higher gasoline and jet fuel costs, but a spokeswoman confirmed the surcharges weren't related to natural gas or electricity costs.

Copyright 2001 Albuquerque Journal

-- Martin Thompson (mthom1927@aol.com), April 10, 2001

Answers

Business must make a profit. These higher expenses have to be reecovered some way. I'll be upset if surcharges appear on fast food bills or vending machines.

-- John Littmann (LITTMANNJOHNTL@AOL.COM), April 10, 2001.

Last year we stayed at a resort on the coast in Wales. The electric meter was inside the cottage, and we had to feed it one-pound coins for our lights, hot water, and heat. Quite common over there, we were told.

-- Cash (cash@andcarry.com), April 11, 2001.