Why Are You Surprised That Resort Fees “Provide Real Tangible Value” to You?
You have probably read the astonishment by authors of multiple articles about a quote which was attributed to Vijay Dandapani — who is the chief executive officer of the Hotel Association of New York City — in response to the new policy of Booking.com pertaining to charging commissions to hotel and resort properties which impose mandatory resort fees on their guests, as he actually sees value in mandatory resort fees for hotel guests.
Why Are You Surprised That Resort Fees “Provide Real Tangible Value” to You?
“Resort and urban fees provide real tangible value to the guest and there is plenty of empirical evidence that a majority of guests have no problem with it, and appreciate the value offered,” Dandapani said, according to this article written by Dennis Schaal for Skift. “Booking’s adding a commission to that is akin to tacking on a charge on to a range of other products and services guests consume at a hotel after checking in, and will only increase the cost to the consumer while unfairly penalizing the largest customer base: hotels.”
“I’m curious what the ‘empirical evidence’ that they’re referring to is. Perhaps they reason that guests “have no problem with” the fees because they end up paying them (because they’re, you know, mandatory)? And therefore they also reason that guests appreciate the value offered by these fees?”, according to this article written by Ben Schlappig of One Mile at a Time. “He’s also completely off base to argue that this is the same as online travel agencies charging for additional services after check-in. These fees are mandatory, and there is no way to avoid them. There is a way to avoid other add-ons after check-in.”
Edward Pizzarello of Pizza in Motionopined in this article, “Well, then. I can’t really imagine how rational minds could agree with this statement. It wouldn’t shock me if the evidence he cites to prove that a majority of guests have no problem with resort fees is the fact that customers pay resort fees. They’re required to pay them. No choice in the matter.”
Gentlemen: how can you be so obtuse? Don’t you all know that mandatory resort fees have been beneficial to guests for years; and that guests find significant value in them?!?
The Main Advocate of Resort Fees for Years
Although the outrage against resort fees may seem universal with the prevalent negative coverage all over the media, not everyone opposes them. The American Lodging and Hotel Association is an organization which is an advocate for the lodging industry in the United States — so its stance in support of resort fees is not surprising.
“Transparency and guest satisfaction are at the core of the industry’s business model”, according to this official overview from the American Lodging and Hotel Association. “The hotel industry provides guests full disclosure for mandatory resort fees charged up front. In fact, they were created in an effort to provide consumers with the best value by grouping amenity fees into one cost. If consumers were charged individual fees for all amenities, the cost would likely be prohibitive. This practice aligns with guidance introduced by the Federal Trade Commission (FTC) in 2012.”
Consumers should be aware of the exact amount that they are paying for each item of the bill – cost of the room, fees and taxes – and each should be broken out separately. Our industry is transparent about fees and discloses them prior to a guest booking online.
However, that is not necessarily the case with online travel agencies, which tend to bundle fees and taxes, resulting in consumers being unaware of how much they are paying for each item.
The bottom line is that the hotel industry embraces a competitive business model that is driven by transparency. Ensuring guests have all the necessary information prior to booking their rooms is central to that model and consumer satisfaction.
The “Facts” on Mandatory Resort Fees
Long before the quote which was attributed to Vijay Dandapani was said, the “facts” on mandatory resort fees were posted at the official Internet web site of the American Lodging and Hotel Association.
What are Resort Fees?
Resort fees, often called amenity fees, cover the costs of a range of hotel amenities, from pool use, gym access, towel services, to Wi-Fi and newspapers.
These mandatory fees are usually “bundled” to provide guests with a better value for these services that would otherwise cost more if charged individually.
Mandatory resort fees are different than fees that include taxes or additional surcharges.
Mandatory resort fees are not widespread in the hotel industry.
Contrary to reports, resort fees have steadily declined over the past decade.
According to a comprehensive survey on hotel trends, a mere seven percent of hotels charged mandatory resort fees in 2014. STR, “The 2014 Lodging Study Hotel Trends: An Inside Look at Popular Amenities and Guest Services.” The study consisted of more than 9,600 participants, it is the most comprehensive analysis of the trends in the hotel and lodging industry based on direct feedback from hotels. Respondents are also representative of the geographic makeup of the hotel industry. Released December 2014.
That percentage has remained under seven percent since 2000.
Hotels Disclose Resort Fees Transparently to Consumers Prior to Booking
Resort fees are fully disclosed up front and clear to the consumer at the time of booking and remain transparent to the consumer.
When consumers book directly with the hotel, either on the hotel’s website or through the reservation phone line, all fees, including any resort fees that are included, are displayed.
Online Travel Agencies Should Disclose Resort Fees Transparently to Consumer Prior to Booking, Including Misleading Taxes and Fees
Online travel agencies should be ensuring that fees are disclosed transparently to the consumer.
In many jurisdictions online travel agencies are pocketing consumers tax dollars, and with the consumer never the wiser.
The Federal Trade Commission (FTC) Has Reviewed and Provided Guidance on Resort Fees
In 2012, the FTC looked into the transparency of resort fees and provided industry guidance.
The FTC conveyed that as long as these fees are disclosed upfront and clear to the consumer, then there is no indication of deceptive practices.
“Setting the Record Straight on Mandatory Resort Fees”
According to this article by the American Lodging and Hotel Association, the “hotel industry prides itself on offering an array of amenities and services to ensure guests have what they want and need from their travel experience” and that “Making sure guests have all the necessary information prior to booking their room is paramount.”
The American Lodging and Hotel Association claims that “consumers want transparency across all online booking channels”:
The hotel industry advocates for the same level of transparency on fees and service charges to be provided by all market players who book rooms in the lodging marketplace. It’s best for the consumer and it’s best for the industry.
Yet, only half of all online travel consumers (50%) are aware that online travel agencies (OTAs) charge additional fees to consumers and 66% say online travel agencies should NOT receive a fee from consumers when they learn OTAs also receive a commission from hotels.
To make matters worse, the OTA’s do not always pay all of their taxes, depriving communities of much needed revenue
Are online travel agencies nickel and diming consumers, hotels, the government and the communities they operate in? You decide.
I have not met one single person — outside of the lodging industry, anyway — who favors mandatory resort fees; but I will do my best to debunk the information in this article.
The hotel industry provides guests full disclosure for mandatory resort fees charged up front. With some exceptions, that is a complete lie. Consumers must wade through the booking process at the Internet web sites of many hotel and resort properties before they see the first sign of a resort fee; that it is mandatory; and what exactly the fee — plus the tax for the fee — will cost. I know that because while compiling this incomplete database of hotel and resort properties which levy a mandatory resort fee, I checked on every single hotel and resort property to ensure that the information is current — and I myself was required to start the reservation booking process before I found out about the resort fees at many of those hotel and resort properties.
In fact, they were created in an effort to provide consumers with the best value by grouping amenity fees into one cost. If consumers were charged individual fees for all amenities, the cost would likely be prohibitive. Wrong. The issue is that many consumers do not want to pay for “amenities” which they will likely not use — such as a newspaper delivered to the room, “free” local telephone calls, or a nominal discount at the overpriced bar or restaurant within the hotel or resort property.
Consumers should be aware of the exact amount that they are paying for each item of the bill – cost of the room, fees and taxes – and each should be broken out separately. Our industry is transparent about fees and discloses them prior to a guest booking online. Why stop with amenities? For the sake of true transparency, how about breaking out what consumers pay for housekeeping, electricity, water, maintenance and other costs? I do not see any hotel or resort property being transparent about those items.
However, that is not necessarily the case with online travel agencies, which tend to bundle fees and taxes, resulting in consumers being unaware of how much they are paying for each item. I have always felt that consumers should have both options available to them for the best purchasing decisions: give the final overall cost; and provide a breakdown of that overall cost for consumers who want to know more information. Why does it have to be one or the other?!?
Resort fees, often called amenity fees, cover the costs of a range of hotel amenities, from pool use, gym access, towel services, to Wi-Fi and newspapers. If the resort fees were optional, this statement might be more sensible — but resort fees are mandatory. This means that consumers are required to pay for these “amenities” whether or not they use them. Because they are mandatory, that statement is rather misleading. If all guests are required to pay for these “amenities”, then they should be included as part of the room rate — period.
These mandatory fees are usually “bundled” to provide guests with a better value for these services that would otherwise cost more if charged individually. Once again, these services are of no value to guests if they do not use them but are required to pay for them — or am I missing something here?!?
Mandatory resort fees are different than fees that include taxes or additional surcharges. That statement is perversely true, as many hotel and resort properties add a tax to these mandatory resort fees. Otherwise, I do not see the difference — nor is that difference explained.
Mandatory resort fees are not widespread in the hotel industry. Perhaps that statement might have been true when it was first written; but more hotel and resort properties are not only charging mandatory resort fees, some are charging them in the form of mandatory destination fees and mandatory facilities fees. This statement may be nothing more than semantics — especially if the term mandatory resort fees excludes mandatory destination fees and mandatory facilities fees.
Contrary to reports, resort fees have steadily declined over the past decade. To my knowledge, that statement is an outright lie — and with no data provided to prove that statement to be true.
According to a comprehensive survey on hotel trends, a mere seven percent of hotels charged mandatory resort fees in 2014. I am not a gambler; but I would bet that that percentage increased for the year 2019.
That percentage has remained under seven percent since 2000. What is the point of this statement; and what is it supposed to prove?
If I Opened My Own Resort Property and Charged Mandatory Resort Fees…
I can easily offer those aforementioned amenities and services at Resort Fee Resort Resort — A Resort to exaggerate the ridiculousness of mandatory resort fees; but I am willing to offer a whole lot more. Let’s see some second-rate resort property top all of the amenities, features and services I would offer — all of which would normally cost an extra charge — for the low low room rate of only $18.99 per night, which does not include the resort fee of only $1,313.13 per day plus taxes and fees:
Incoming telegrams and telegraph messages in Morse code
Unlimited use of a manual typewriter in our business center — carbon paper is available for copies at an extra charge per piece
Free 15 minute usage of radio, television, 8-track tape player, telephone book and Bible in your desk drawer per day — additional usage available at a significant discount
Complimentary unlimited advertisements and other unwanted reading material to clutter your room
Valuable coupons for use at local retail establishments which offer such useful products and services as video rentals, film processing and the sale of sets of encyclopedias
Complimentary use of lighting already equipped in the room for your convenience
Unlimited use of bedding, which includes sheets, pillows and a blanket — bed bugs are readily available at an extra cost
Opaque solid door to room included to ensure privacy — and use of locks on the door are included as well for your security; and as an added bonus, you will not have to pay a single penny extra for the walls, ceiling and floor which comprise your room except for the grout fee and caulk fee in the toilet room
Reusable plastic bag which was the vehicle used to protect your newspaper and hang it on the outside of your door
Complimentary use of mirrors in the room — although upon reflection, that might incur an additional fee in the future
Complimentary use of wastebasket for included removal of any refuse from your room
Complimentary viewing of outside from the convenience of the window equipped with your room
Writing instrument and paper — limit one of each per stay
Complimentary use of walkways on grounds for your walking pleasure — just bypass the toll gates
Complimentary daylight after nighttime concludes
Complimentary unlimited amounts of air for your breathing pleasure — heating and cooling of said air available for a modest fee
Mandatory resort fees “provide real tangible value” to you or me — my…you-know-what.
I have said it many times before; and I will say it again: if management at a hotel or resort property wants to levy a resort fee for amenities and services, that fee should be optional in which the consumer has the final say on whether or not he or she wants to pay that resort fee — and if the resort fee is mandatory, then instead of separating it from the room rate, include it as part of the room rate…
…but hotel and resort properties which charge mandatory resort fees do so to give the perception that their advertised room rates — which never disclose mandatory resort fees — are deceptively lower than their competitors; to avoid paying travel agencies commissions; and in some cases, to avoid paying more money in government taxes.
Mandatory resort fees clearly do not benefit the consumer. They do not provide consumers any value or benefit. Worst of all, they do not give consumers the choice of whether or not to pay them. To suggest otherwise is outright deception and lies.
To add insult to injury, guests usually must pay taxes resulting from the mandatory fee — regardless of what it is called.
Regardless of the method of enrichment — including compensation in the form of points — no one should be subject to the deception of mandatory resort fees and their brethren, as it is nothing more than advertising artificially low room rates to which the unsuspecting guest may be attracted but could never hope to pay such an inexpensive rate. Lodging properties should instead simply raise their room rates by the amount currently covered by these mandatory fees for truth in advertising.
Other sites which are in the fight against resort fees include ResortFeeChecker.com — with which you can check on which hotel or resort properties charge the mandatory fees and how much they will lighten your wallet or purse — and KillResortFees.com.
That I vehemently oppose the implementation of mandatory resort fees, facilities fees and now destination fees is no secret to you if you have been a reader of The Gate for years — they should either be optional or eliminated altogether — and I will just let this extensive body of work over the years pertaining to mandatory resort fees speak for me…