Resort fee

From Wikipedia, the free encyclopedia - View original article

 
Jump to: navigation, search

A resort fee is a mandatory nightly surcharge imposed by hotels, nominally to cover the cost of certain amenities. Unlike room rates, which vary hugely according to season, the resort fee is generally a fixed amount per night.

By charging a resort fee, the hotel is able to advertise an arbitrarily lower nightly rate, which may give an advantage over competitors not charging the fee who must then advertise a higher nightly rate in order to realise the same income. In some cases the existence of a resort fee is not well-publicised, and the guest might only find out about it upon check-in.[1] Internet price comparison engines such as Priceline.com normally don't include resort fees, and consumers get misled as a result since hotels having higher resort fees appear closer to the top of the list.

The fee is usually described as covering amenities such as internet access, fitness center usage, parking, and a daily newspaper. Although many hotels will charge guests for these amenities, the actual additional cost of providing a night's internet access or fitness center usage is negligible, and therefore while the bundled services may have a high separate cost, that cost, unlike resort fees, is at least avoidable by guests not wishing to use the amenities.[citation needed]

Resort fees are most prominent within the United States, with particular high levels of concentration in the states of Florida (particularly the city of Orlando), Hawaii (the entire state) and Nevada (Las Vegas).

Rationale[edit]

MGM Resorts International senior vice president Alan Feldman, regarding consumer anger and justification for charging fees, has said:

“We have heard negative feedback from guests, but we’ve also heard positive feedback, from guests who are happy that they are no longer paying à la carte for different services. They don’t feel nickeled and dimed.” [2]

Hotel chains use resort fees as revenue drivers. MGM Resorts International stated the following regarding Las Vegas hotel rooms during a Q1 2011 conference call:

"Our RevPAR (revenue per available room) in the first quarter was up 16%, including resort fees. Excluding resort fees, REVPAR was up 11% in the quarter year-over-year." [3]

Rates and coverage[edit]

An incomplete list of the amenities covered by a resort fee include (note: these vary by resort):

In Las Vegas, fees vary from $3/night to $25/night (plus taxes).[1] Fees of up to $60/night are charged at some resorts.[4]

Online hotel brokers[edit]

Some online bidding engines, such as Hotwire.com and Priceline.com, do not fully disclose the amount of the resort fee within their booking checkout screens. For example, Priceline's 'Name Your Own Price' listings state the following:

"Depending on the property you stay at you may also be charged (i) certain mandatory hotel specific service fees, for example, resort fees (which typically apply to resort type destinations and, if applicable, may range from $10 to $40 per day)" [5]

Resort fees are particularly pernicious in the case of "opaque" booking engines such as Hotwire and Priceline because consumers have no way to find out about the fees before purchasing the room. In the case of conventional bookings, a customer can identify the resort fee before committing to staying at the hotel (even if they are not well identified). Opaque bookings require the customer to prepay an amount, which amount is forfeitted if the customer then refuses to pay the additional resort fee.

Legality[edit]

In 2012, the Federal Trade Commission has warned 22 hotel operators that their online rate quote totals, which did not include resort fees, may violate FTC regulations relating to deceptive practices.[6]

Additionally, the Federal Trade Commission states the following regarding how hotels and third parties should disclose such fees:

Listing the “resort fee” near the quoted price or in the fine print — or referring to other fees that “may apply” — isn’t good enough.[7]

Notes[edit]

Resources[edit]