Resort fees are a scourge that has spread from Las Vegas and infected other popular tourist destinations, namely areas in Orlando and Anaheim near the Disney Parks. Once seldom found outside of Vegas and Hawaii, resort fees have proliferated in the last few years at off-site hotels near Walt Disney World and Disneyland. These fees range from $5/night to over $40. There are now 110 hotels in Orlando and a small but growing number near Disneyland that charge resort fees.
July 24, 2019 Update: Earlier this month, the District of Columbia attorney general filed a lawsuit against Marriott, accusing the hotel giant of deceptive fee practices. The suit accuses Marriott of employing “an unlawful trade practice called ‘drip pricing’ in advertising its hotel rooms, whereby Marriott initially hides a portion of a hotel room’s daily rate from consumers.” This is commonly labeled as a resort fee. Per the suit, Marriott has “reaped hundreds of millions of dollars over the past decade from this deceptive drip pricing.”
This lawsuit has garnered serious public attention, and was borne out of an ongoing investigation conducted by the attorneys general of all 50 states and the District of Columbia into the industry-wide practice of charging mandatory resort fees. While the lawsuit does not seek to outlaw resort fees, it challenges how they’re displayed. Moreover, the public outcry following this suit means a legislative solution is likely–and that’s where the practice of charging non-optional resort fees could be deemed illegal and, ultimately, killed…
On occasion, I meet with hotel managers so they can give me a tour of their properties. Since I’m an awkward person who “enjoys” awkward encounters, if they charge a resort fee, I always ask why. The explanations typically range from ‘to show consumers we offer more amenities’ or ‘so our pricing is fair as compared to other hotels that don’t have these services.’ I’m not satisfied with these B.S. answers, so I push further. The underlying rationale seems to be because everyone else is doing it.
That attitude is why I believe this post–a departure from the typical tone and substance of our content here–is appropriate and significant. Tourists heading to Walt Disney World and Disneyland are being fleeced by third party hoteliers at off-site hotels (Disney itself does not charge resort fees). More importantly, there’s something we can do about it.
Let’s start with the problem itself. Those in the hotel industry like to explain away resort fees by comparing them to baggage and other fees charged by the airline industry. While most consumers also don’t like the nickel and diming that has become standard M.O. among the airlines, that’s immaterial, because resort fees are totally different. The critical distinction is that to avoid baggage fees, you can travel light. Resort fees are non-optional.
There’s no way to opt-out if you sign a pledge to not use the pool, read a newspaper, or make a cup of coffee. Since the fee is non-optional, literally every guest is paying it, just as every guest is paying the base rate. So there’s no logical argument that can be made to separate the two. But that’s not the point.
Resort fees aren’t being charged because hotels have elected to go above and beyond in offering a particularly robust slate of resort amenities like a complimentary Porsche to use while at the hotel or an in-room Smurf providing personalized concierge recommendations. (One of those is an actual amenity at a real hotel…sadly, it’s not the latter.) To the contrary, resort fees often have little to do with the amenities offered, and such fees are charged just as often at motels as they are actual resorts. (This motel even charges one. Yeah.)
The real reason hotels charge resort fees is because they make it more difficult for potential guests to ascertain the actual nightly rate. This is particularly true in the era of online booking engines like Expedia and its ilk. Booking engines typically do not show resort fees on the search results page, and only thereafter display them as an asterisk item that there is a fee that isn’t collected by the booking site.
Many travelers never see this fine print, and only learn of the added fee when they arrive at the hotel, by which time it’s typically too late to do anything about it besides grumble a bit, and pay it. Other travelers who see the fees before arrival do so after they’ve already clicked through to start the booking process, making them statistically more like to “convert.” This increased conversion rate metric in turn helps the hotel justify charging a resort fee. In short, hiding the fees is an effective way for hotels to increase bookings.
Likewise, fees and surcharges are an incredibly lucrative revenue stream for hotels. NYU research reveals that U.S. hotels collected $2.35 billion in fees in 2014, and forecast the amount for 2015 as $2.47 billion. This is a pretty substantial number, and even shocking when considering that the amount nearly doubled over the course of a decade from $1.2 billion in 2004. (Note that these fees include other surcharges such as early departure fees, cancellation fees, in-room safe fees, etc.)
Resort fees are effective because they enable hotels to keep their advertised prices ostensibly low to lure travel planners into the booking process with these cheaper base rates. Only later (whether at the confirmation screen or check-in desk) do guests learn that what they will ultimately pay per night is significantly higher than the advertised rate thanks to the hidden fees. This practice isn’t just irritating for bargain-hunting tourists like me. The FTC has called it a “deceptive and unfair trade practice,” and is finally starting to get serious about regulating resort fees.
Of course, this doesn’t actually mean anything will happen. The FTC is a fairly toothless agency that is big on talk and light on action. Back in 2012, the FTC sent a Warning Letter to 22 hoteliers, rebuffing them for the way their resort fees displayed. Nothing changed. Actually, something did change: more hotels started engaging in the exact same practice.
We live in an age of slactivism, where hashtag warriors fight the big issues of our day with angry tweets and modified profile pictures. However, this is one situation where the internet can actually empower people to impact change.
Every time I encounter a resort fee in a hotel I review, I belabor the point that these are consumer-unfriendly and hotel chains have been warned about them in the past by the FTC. This is to the point where it’s probably become tiresome for regular readers, but it’s my way of “fighting back” in a small way, since I’m part of the ‘too lazy to do anything else’ generation. Now, I’d encourage you to fight back in a way that actually could lead to positive change. Here’s how…
In terms of marketing, nothing matters more to hotels than their TripAdvisor ranking. Being in the top 10 or on the first page on TripAdvisor for a specific city is huge, and each higher numerical rung is statistically significant in terms of consumer interest, occupancy rate, and competitive equilibrium pricing. There are even TripAdvisor “Reputation Management” Specialists (and software) who consult hotel brands on how to shape their reputation on TripAdvisor and “handle” aggrieved consumers. Suffice to say, this is all big business.
The simple way to fight back is to review hotels on TripAdvisor, deduct a star (or however much you feel appropriate) for a hotel at which you stayed charging a resort fee, and indicate as much in your review. I would caution against leaving a 1-star review to “balance the scales,” but I don’t think it’s unfair to rate a hotel that was otherwise 4-stars in your mind as 3-stars on TripAdvisor due to the resort fee. For me, it’s certainly star-worthy.
This will not only impact the overall score of the hotel, giving its managers pause about the negative side of their bonus revenue stream, but will bring resort fees to the attention of other potential guests. Someone reading TripAdvisor who may not have been aware of a resort fee will have reason to delve a little deeper, instead of being surprised by a significant additional charge upon check-in.
Since all it takes is 3 negative reviews for the average TripAdvisor user to rule out using a particular hotel, it is possible for anyone to fight back against resort fees. Your voices can matter, and I’d encourage you to use them to send the message to hoteliers. This time, you don’t even have to change your profile pic to make a difference.
What do you think of resort fees? Do they bother you as a deceptive practice, or is this much ado about nothing? Have you stayed in a hotel that charges a resort fee? What did you think of it? Any other thoughts or questions? Share in the comments below!