What Are Resort Fees?
If you travel, you’ve probably come across the dread resort fee before. For those that aren’t in the know, a resort fee is a fee that is charged by hotels and resorts that isn’t included in the room rate & typically aren’t well advertised. A resort fee isn’t optional and it’s usually a fixed fee that is charged on a per night basis.
Las Vegas is the king of resort fees, with pretty much every major hotel charging a resort fee of some kind. In 2015 the NYU School of Professional Studies Tisch Center for Hospitality and Tourism found that hotels made $2.47 billion from fees & surcharges, and this number includes fees such as resort fees.
Why Are They Charged?
Officially hotels and resorts charge these fees to help pay for the upkeep of the resort and resort facilities. Sometimes they will tack on some useless benefits as well, such as free local calls or Cabana access. The problem with resort fees is that once one hotel starts charging them, other hotels almost have to start charging them to stay competitive.
Let’s say you fall into some money and decide to open a hotel on the Las Vegas strip, you hate resort fees like any rational person so you decide to not charge these fees. You price your hotel very competitively, but you notice that you’re still receiving a lot less guests than your competition even though they are more expensive.
This would most likely be because when a consumer does a search for a hotel in Las Vegas, they’ll see your hotel with all the fees included when searching. When they look at other hotels, they think they are getting a great deal but what they don’t realize is they are going to be hit with a resort fee at the other hotels and not at your hotel.
The other reason that hotels & resorts charge these fees is because of the way their deals are structured with online travel agencies (e.g Expedia). Online travel agencies (OTAs) charge these hotels a commission (anywhere from 10-30%, usually around 15-18%) for any bookings that OTA makes. For example, if you book a hotel on Expedia that costs $100 then the hotel will likely pay Expedia $15-$18, but as much as $30.
Because a resort fee is added on to the room rate, hotels don’t pay commission on this fee to the OTA. Just like they wouldn’t have to pay the OTA commission for any of your mini bar purchases.
How To Avoid Them
There is no simple way to avoid resort fees, if a hotel or resort charges them then usually it’s a mandatory fee that must be paid. In some rare cases it’s possible to talk your way out of paying this fee (‘I didn’t use any of the resort facilities’), but in my experience it’s basically a waste of time.
What you can do is as follows:
- Make sure you’re comparing like to like. When you’re searching for a room, make sure you’re aware of the resort fee each hotel charges and include that in your calculation. Kayak shows the total room rate (including resort fees) when you use their mobile application for example.
- Don’t support hotels/resorts that charge a resort fee. In some markets (e.g Las Vegas) this is impossible, but in other markets there are usually at least some places that don’t charge a resort fee.
- Support the Truth in Hotel Advertising Act of 2016 by contacting your representatives. This bill was introduced to the Senate and has now been referred to committee. You can use this website to help find your elected officials and put pressure on them to support things like this.
Final Thoughts
Any charge that is mandatory should be included on the search results page, I don’t really see how this is still an issue. At the moment we’ve got a market that is has a big incentive to charge these fees, making it difficult for companies that don’t want to charge these fees to compete.
