‘Resort fees’ inflating hotel room rates

Much has been said and written about the plethora of nickel-and-dime charges many of the nation’s airlines levy to enhance their profits, but a similar – and equally odious – practice is increasingly being embraced in the hospitality industry: the addition of so-called “resort fees.”

Resort fees are not new. Bona fide resorts began adding this fee to cover the amenities they offered which non-resort properties did not: things like tennis courts, water parks, beach chairs, and the like. In settings like that, the charges made some sense, as there was value returned for the dollars spent.

But not always.

When my wife and I stayed at San Diego’s historic Hotel del Coronado, it levied a $25 per night resort charge which The Del’s key folder said included “complimentary local and toll-free phones calls, high-speed Internet access, daily newspaper, in-room coffee, and access to the fitness center.” It also included a $20 discount on green fees at the nearby La Costa Golf Course and discount tickets to many of San Diego’s attractions.

San Diego's historic Hotel del Coronado

While charges for daily newspapers and local calls are fairly common, most hotels provide most of the other items covered by The Del’s resort fee without any additional charge. Travelers who neither golf nor take advantage of the discount tickets, therefore, receive very little value for the fee.

Now, a colleague reports, many hotels in New York City – including those that could hardly be called “resorts” – are adding this fee to their folios. Even one of our personal favorites, the Lucerne at 79th and Amsterdam on the Upper West Side, levies a $20 per night “facility fee.”

In the case of the Lucerne, it covers Wi-Fi (for which many hotels charge separately), access to the fitness and business centers, a coupon for a 15 percent discount at breakfast, and a 20 percent discount off pre-selected city tours. But as already discussed, not all fees are created equal.

Why are hotels adding them? In part, adding such a fee enables the properties to advertise lower room rates, enticing travelers to book with them over the competition.

For example, instead of offering a rate of $199 per night, a hotel might offer a rate of $159 with a $40 resort fee. The $159 rate would place their property higher up on the list when sorted by price, garnering them greater attention. Potential guests might not even notice the resort fee until they completed their booking.

Such fees also add to the hotel’s bottom line. A 16-page report by President Obama’s National Economic Council stated that, in 2015, “(R)esort fees accounted for $2.04 billion – or 16.6 percent – of revenue for the hotel industry, and they are growing at a far faster rate than inflation.”

That report, issued in December 2016 as Obama was about to leave office, said in its conclusion, “Transparent and accurate pricing is the foundation of an effective and efficient American economy, allowing consumers to make smart choices and to reward the providers of better goods and services. But when pricing is unclear, it threatens the competitive process by which consumers make decisions.”

In practical terms, with fees like resort fees and ancillary fees charged by airlines making it more complicated to determine the all-in cost of travel, travelers must be much more analytical and drill down more deeply. Read more than the ticket or room-night prices displayed on the provider’s website. Actually pick up the phone, talk to someone, and ask what their add-on fees cover. Then, if you don’t like the answer, give your business to someone else.

Fortunately, not all hoteliers are embracing the trend. As TheTravelPro reported, one host on Key West refuses to add such fees, calling it "A shell game we just won't play." Such properties and hotel operators are out there, though you might have to look a bit longer to find them than in years past.

Traditional pastel houses on Key West

The Obama Administration report, which didn’t get nearly the attention it deserved, ended with a call for action on the part of policymakers, researchers, and the private sector.

“All actors … need to build on the actions of Administration and seek to mitigate or eliminate the growing use ‘hidden fees’ across a number of industries.”

I think that’s something all travelers can get behind.

The full report is available here.

Visit my main page at TheTravelPro.us for more news, reviews, and personal observations on the world of upmarket travel.

Photos by Carl Dombek
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