All costs of a business are passed to the consumer. Where do you think the money a business makes comes from? Sure, if there's a cost increase, a business can decide to lower the profit margin to avoid increasing the price, but the costs are still being passed on.

which in fairness should then be variable based on its usage

Why? When did it become wrong to charge flat fee for a service? The cleaning lady is also charging a flat per hour fee even though it's cheaper for her to do a single 3-hour job instead of 3 1-hour ones, is she being unfair too?

Nobody who offers a service can or should be required to charge proportionally to the costs. It's irrational to demand that.

That 'fee' should be rolled into the rental cost/cost of doing business.

I suggest he eliminates the cleaning fee and raises the prices by $35/visit. Apparently the morality of a fee depend on whether it's itemized.

He is using it to augment his profit

The nerve.

So if you stay one night you pay $35 and if you stay seven nights you still pay $35. Raising the per night rental fee would mean penalize people who stay longer than the average stay.