Resort fees….. the hidden treasure of hospitality

Imagine going to the supermarket, filling up your basket and moving towards the cash register to check out. Upon paying you are presented with a fee, €1 to pay for your groceries. Its mandatory but yet not presented at any moment during your shopping process and there is no way to get around them (by checking out with a self-service kiosk). Would you accept this “charge”? Well, this is exactly whats happening with the so-called resort fees.

Background

I have been aware of the existence of resort fees for a long time, but it was only until I was looking for a hotel in Las Vegas when I experienced this practice. I will stay in Las Vegas for 3 nights in October and since I do not expect to return (it will be my fourth time), we wanted to book a hotel near the strip. Because why not? It’s definitely worth the premium on the price.

But we were still on a budget, so after selecting a few hotels that looked good to us, we went digging a bit deeper and discovered the resort fees can add up pretty hefty. After that, I started doing some reading about this charge and discovered it’s not as cute as it sounds.

What are resort fees

Resort fees are probably the most hated fees ever, an I can imagine why. The resort fees are surcharges added by hotels/resorts on top of the advertised prices on their websites and allow guests to freely use all available amenities and services offered in a hotel.

This fee appeared halfway the 90’s after mega-resorts were built on the Las Vegas Strip such as the Excalibur and the Mirage Hotel which were the first millennial generation resorts in Las Vegas. Guests of these hotels had to pay extra for about every service and amenity. To avoid having guests being “nickeled and dimed” for about everything, the resort fee was introduced.

At first, this fee was optional; guests that did not use the facilities could opt out but shortly after the new millennium, it became a mandatory fee for all guests.

Nice to know: In 2015, resort fees brought an extra $2,47 billion to US-based hotels.

What kind of fees are we talking about?

The resort fee is an “on check-in imposed” charge and can differ in price per hotel, city and even period of stay. The high season might mean a higher resort fee than the low season. The fee covers all extra offered amenities in the resort and avoids nickel and diming.

How much are we talking about?

The height of the resort fee is decided by a plethora of factors. As a rule of thumb we take Las Vegas; the origin of this fee: In Vegas, a budget hotel such as the 3* CircusCircus charges a $39,86 resort fee per night.

Resort fees in more upscale hotels such as the MGM, Wynn, Encore, Palazzo or the Venetian can be as high as $53 per night.

I even read stories about a super expensive 5***** resort on the Bahamas ($1200 per night) charging $189 resort fee per night.

Why do hotels impose them?

  • A major reason is that hotels look a lot cheaper without the resort fee: On hotel search machines and in hotel meta-searchers hotels will be shown with an “advertised price”, (prices without resort fees). These hotels seem to offer a very good deal. Management then hopes that future guests will get excited and take the extra fee for granted because “heck, I’m only in Vegas once!
  • Saving on commissions: Hotels pay a commission over the sold rooms to their partners such as booking.com. These commissions are usually a percentage based on the room rate. By adding an extra layer that is collected at check-in, hotels are able to save on the commissions they have to pay.
  • Saving on taxes: Room rates are usually differently taxed than fees and surcharges. IE. in New York, room rates are taxed at 8.875% instead of the hotel occupancy tax of 14.75%. That basically means there is a 5.875% tax loss.

What are the effects?

Needless to say no consumer likes to be fooled into crazy hidden fees and surcharges and the internet (including Tripadvisor) is full of complaints about this fee.

A funny development is that another annoying practice in Vegas (Time-share sales) are now suddenly becoming an interesting competitor to the hotels as time-share owners are putting their properties on Airbnb (and with this avoiding the resort fees but allowing their guests to use all hotel facilities).

Good to know: Airbnb in Vegas has doubled in 2017. A sign of the market I guess.

Is it actually legal?

It depends if this practice is legal. In Europe; no way! Advertising prices that not include all mandatory costs are illegal in every state of the European Union.

In the United States, things are a bit different. It’s currently not illegal. It will be no surprise to anyone that a strong Hotel Owners Lobby will try to keep this practice legal as long as possible.

The Federal Trade Commission is reported to investigate the practice and has sent out a few warnings to hotels but has not taken any other action so far. Even though this practice is illegal in Europe, there are plenty of American Hotel organisations illegally advertising hidden rates to their European users.

How to deal with them?

Even though it’s not illegal in many places I would definitely encourage anyone to dispute and refuse to pay for these fees. According to Killresortfees.com, there are three things a consumer can do:

  1. Refuse to pay: just refuse to pay. Get into an argument with the front desk and explain to them this. I guess no hotel wants this and they know they are wrong.
  2. Dispute with your credit card: Just dispute the payment with your credit card company and explain this scam. Those resort fees are not only hidden; sometimes they are extremely hard to find and therefore this, in my eyes, is sufficient to claim being scammed.
  3. Go to court: This does not really apply to European consumers but US citizens can definitely go to a court and sue the hotels.

In which hotels and locations can I find resort fees?

I have seen resort fees being asked in plenty of destinations; Notably US-based properties in Las Vegas but also in Miami and even New York (Not sure if THIS place can be considered a resort. They ask $37,80 per night though).

Also, hotels and resorts in the Middle East and in Asia have started to introduce this fee. I got to pay it when in Dubai.

Bottom line:

Resort fees are here to stay for the short term but I wonder when hotels and governments will start to realise that this is really an unfair practice towards consumers and basically killing a lot of goodwill.

Personally, I will always avoid paying this; either by arguing with the hotel, disputing with my CC or going to court. I don’t like to be scammed and no company should make this a core part of their strategy!

3 Responses
  1. carlos

    Refuse to pay might be a good way not to pay but to go to jail ^^. Dispute with credit card company might end up in court. End up in court might be more expensive than the fees.
    I would definitely claim the European Union’s comission for consumer protection to make all meta-searches, search engines and US hotel sites, to mandatorily aggregate hidden fees for users in the EU (alike GDPR). That would be a nice solution, and interesting trigger for Mr Trumps tweets

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About Ingmar Bruinsma

Ingmar Bruinsma is an entrepreneur in the travel industry. He also provides consultancy services in the field of marketing, business development to clients in travel & aviation. He blogs about topics in tourism, travel, aviation, digital marketing.


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