Mandatory Facilities Fee: A Growing Deceptive Trend in Lodging?
I have long been adamantly against the policy of hotel and resort properties imposing mandatory resort fees to the room rate of a hotel, citing that if a guest is required to pay that fee anyway, it should be included in the room rate.
Why Resort Fees are Unfair to Consumers
Although the resort fee may be clearly disclosed during the process of booking a reservation for a room at a hotel or resort property — which is certainly legal — the room rate is often advertised without including the mandatory resort fee, usually causing comparisons of the total cost of staying in a room for one night between different hotel properties to be significantly more difficult for the consumer, as illustrated in what was posted by FlyerTalk member architect1337 in a discussion called The Dreaded and Despised Resort Fee:
Makes it difficult to do comparisons between suppliers.
X provides a service for Y$
Z provides a service for Y+$10
X charges a $25 resort fee. Z doesn’t. You don’t get to see this until you check out. You initially chose X because all things equal, you thought X was cheaper. It wasn’t.
Z decides to reduce it’s price by $20 but charge a $30 resort fee. Who is cheaper now? (don’t worry – it’s not a trick question). This then becomes doubly difficult when talking about airlines….
Mandatory Facilities Fee: A Growing Deceptive Trend in Lodging?
FlyerTalk members are now griping about something called a mandatory facilities fee, which is basically the same charge as a resort fee — except it is imposed at a hotel property which is not a resort; and a list of these hotel properties are being compiled in the WikiPost of this discussion.
As with resort fees, some of the services included as part of the facilities fee usually are already available to guests who have earned elite level status in a frequent guest loyalty program — such as free access to the Internet or bottles of water…
…and some of the services offered are those which you might not use during your stay. This could include a discount off of admission to a nearby attraction or facsimile — or fax — services. With the widespread proliferation of mobile telephones, offering local and long-distance telephone calls as included in a facilities fee is basically useless to most guests.
The facilities fee is a relatively new idea for generating revenue for a hotel property which is not considered a resort and therefore theoretically technically cannot use the moniker resort fee; but it has been around for at least three years. As I first reported in this article on Sunday, December 9, 2012, the Le Parker Méridien hotel in New York has announced that it will implement a mandatory daily facilities charge of ten dollars per day effective as of Tuesday, January 1, 2013. At that time, this fee — which has since increased by 50 percent to $15.00 per day — included the following:
- Wired or wireless high-speed Internet access for multi-devices in guest rooms, the lobby, restaurants and the bar — although Internet access does not apply to meeting rooms or pre-function areas
- Unlimited use of gravity fitness center
- Unlimited use of the penthouse pool
- Unlimited toll free and local calls from your in-room phone
Reasons Why What is Included in a Facilities Fee is Often Superfluous
I had some issues with what was included in the facilities fee…
- High-speed Internet access has slowly become a complimentary benefit in facilities throughout the travel industry — not to mention that it is already free of charge for elite members of many frequent guest loyalty programs
- Not everyone finds the use of a fitness center appealing or has time to use the hotel pool — regardless of whether or not it is located in the penthouse; so why impose a mandatory charge on hotel guests who will not use it?
- Unlimited toll free and local calls from your in-room phone is useless for those people who carry a mobile telephone — which is just about everyone these days
Why Add a Facilities Fee? It May Not Solely Be For Additional Revenue
Do not forget that by charging undisclosed mandatory daily resort or facilities fees in addition to the room rate, travel agents potentially will not receive a commission on the fees — and you potentially will not earn frequent guest loyalty program points on what you paid in fees. We are talking about potentially free and clear profit for the hotel property — and I am uncertain at this time as to how a resort fee or a facilities fee affects the taxable income a hotel property is required to pay. Are facilities fees and resort fees a source of revenue which is tax exempt?
Hotel properties should be required to disclose all mandatory taxes and fees and include them in the room rate, as required of airlines in the United States as of January of 2012 with regard to fuel surcharges and carrier-imposed fees. This will give the customer more of an advantage to fairly compare room rates at competing hotel properties before deciding to book a reservation. It is a waste of time for the customer to have to investigate every single room rate to find out what is the absolute true total cost.
What You Can Do
Consider doing the following to help end this deceptive and sneaky practice of hotel properties charging undisclosed mandatory fees:
- Boycott hotel properties which impose undisclosed mandatory fees to its guests. Hit them where it hurts — in terms of reduced revenue. Vote with your feet and choose an alternate hotel property, if available.
- Alert the Federal Trade Commission of the United States of this practice by filing a complaint when reporting hotel properties such as the Le Parker Méridien in New York.
- Spread the word about these rogue hotel properties and their unfair policies to family, friends and colleagues. Encourage them to join you in the boycott, file complaints to the Federal Trade Commission of the United States, and spread the word to their families, friends and colleagues.
- Help me compile a list of hotel properties here to fight mandatory resort fees and mandatory facilities fees so that you have a quick and convenient resource as to which hotel and resort properties to avoid
I have no problem with hotel properties charging fees in order to increase revenue and cover costs — and, dare I say, even profit from it — as long as disclosure of those fees are as clear and as easy to find throughout the entire reservation booking process as possible, and as long as the fees are “unbundled” from the room rate for optional amenities and services. For example, if use of the hotel pool now costs ten dollars per day instead of including it in the room rate, impose it as an optional charge and reduce the mandatory room rate by ten dollars per day. This is fair, as only those who use the pool will pay the fee.
If Le Parker Méridien and other hotels really need that extra revenue, then either include it in the room rate; or offer it as an optional fee. Either way, this must be clearly disclosed up front to the customer in an obvious manner. Until then, Le Parker Méridien — as well as other hotel properties which similarly charge undisclosed mandatory fees exclusive of the published room rate — you are not entitled to one single penny of my business until you stop and end this deceptive policy.
Photograph ©2015 by Brian Cohen.