How resort fees can drive up the cost of a hotel stay — and what travelers can do about it

It’s one of travelers’ biggest complaints about hotels: the dreaded — and often undisclosed — “resort fee.” For anywhere between $20 and $90 a night, the fee can include a free pool towel or beach chair, internet access, maybe a bottle or two of water, a daily newspaper, and maybe access to the health club.

But many hotels don’t readily disclose these fees when travelers make a reservation, and others don’t tell you about the fee when you check in. cost.

The other problem: Most travelers don’t want or need these services and question why they would be charged for them.

The resort fee phenomenon began in the mid-1990s.

In the beginning, fees were only found at real resorts in tourist destinations. But they have spread across the United States to hotels of all kinds, including city hotels. Some city hotels call them “destination fees”. And these fees aren’t necessarily charged only by luxury hotels. Travelers may be surprised at these rates even at a two-star hotel.

Travelers complained early on, claiming that hotels lacked price transparency and had an obligation to disclose these charges.

Ten years ago, the US Federal Trade Commission warned 22 hotels that resort fees were not properly disclosed on hotel booking websites. The FTC claimed that the resort fees amounted to a form of “drip pricing”, an insidious way to increase the actual room rate.

While some hotels modified their disclosures, many ignored the federal agency’s warning. And the FTC did not pursue the warnings with any legal action. Instead, the number of hotels evaluating resort fees — and the amount of those fees — continued to rise. The FTC reported that in 2015, consumers paid about $2 billion in resort fees, 35% more than the year before. Rates continued to rise rapidly in the following years.

Why are resort fees so popular with hotels?

State and local governments levy occupancy taxes and sales taxes on room rates, which means a large chunk is taken from what hotels charge. But with a resort fee, hotels keep most of the fee, minus a much lower sales tax. And hotels don’t pay commissions to online sites like Expedia or individual travel agents on resort fees.

This may also explain why airlines make more money from ancillary fees, such as checked bags, than from much of their ticket sales revenue. An airline ticket is taxed at a high rate of federal excise tax. Tax on a $100 nonstop domestic ticket would be a minimum of $27.30 – and good luck finding something at that price. But a checked bag fee is taxed at a much lower state sales rate. The airline makes a lot more money from the $60 it charges for two checked bags than it does from the $100 ticket. It’s not even close.

How some states are acting

As more hotels charged resort fees – essentially the same tax evasion – consumer complaints increased. And soon, attorneys general in all 50 states opened investigations. The Pennsylvania attorney general and the DC attorney general acted first, filing separate lawsuits in 2019 against Marriott for violating consumer protection laws, alleging that the hotel company was essentially charging a second room rate when evaluating a hotel. separate resort fee. States charged that by listing a room without including the resort fee in the price, hotels were able to advertise an official rate lower than the actual price of the room.

In November 2021, Marriott reached an agreement with the Pennsylvania Attorney General. In the settlement, Marriott did not admit wrongdoing, but agreed to within nine months — that is, August 2022 — include the fees on the front page of its booking site.

What Consumers Can Do About Resort Fees

Does the full disclosure agreement mean the resort fee issue is resolved? Difficultly. What hotels don’t offer is that many of these fees are negotiable, even at hotels that post that their resort fee is “mandatory”.

But travelers need to vote with their wallets and book their hotel rooms as part of a conversation with the hotel, not online.

The internet cannot answer these questions: Is parking free? Can you waive the cost of the internet? Can my kids stay for free or even eat for free? And considering that most hotel resort rates include things most guests will never use, arguments can be made – and have been successful in many hotels – for a more reasonable, negotiated à la carte room rate.

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