Is the end near for hotel resort fees?


An alarming rise in mandatory resort fees is pushing the Federal Trade Commission (FTC) to consider a change to its four-year-old policy on the controversial surcharges.

In 2012, the federal government’s consumer protection agency allowed hotels to add required fees to their room rates as long as the surcharges were disclosed before the room was booked. But it created a loophole that allowed properties to quote a low initial room rate online and then add the mandatory fees later in the process, which consumer advocates argued was unfair and deceptive.

Now, the FTC may be ready to signal that it agrees — that resort fees as they are currently advertised are unfair and deceptive. The agency is poised to announce a policy shift that would require resort fees to be included in the initial price quote — according to multiple sources who spoke on the condition of anonymity because they were not authorized to speak publicly — a move that would effectively end resort fees as we know them. It’s a position that even the hotel industry seems to be warming to.

The FTC declined to comment.

Resort fees, which typically cover amenities that were previously included in the price of hotel rooms, such as the use of an exercise facility or business center, have been a long-standing irritant for hotel guests. In the first six months of 2016, the fees have jumped 8 percent to an average of $19.52 a night. The markets with the biggest increases: the Florida Keys (24 percent), followed by Myrtle Beach, S.C., (22 percent) and Miami (20 percent).

“This was quite shocking to me because resort fees are already so high,” says Randy Greencorn, who tracks resort fees on his site, Resortfeechecker.com. “I did not think there was room to grow.”

But there is, and one of the triggers may have been a hearing last year by the Transportation Department’s Advisory Committee for Aviation Consumer Protection, in which an agency representative affirmed that the fees were allowable and could be added to the cost of a room, as long as it was done before the booking was complete. Hotels viewed this as a green light to not only continue charging the fees but to aggressively increase them.

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“Breaking apart the resort fee from the room cost has no purpose, except to make the room rate look less expensive at the time of booking,” Greencorn says.

The FTC’s decision would mark the latest chapter in a lengthy fight between the hotel industry and consumer advocates. Customers have fought the fees for more than a decade, but earlier this year, they found a friend in Washington when Sen. Claire McCaskill (D-Mo.) introduced the Truth in Hotel Advertising Act of 2016, a proposed law that would prohibit hotels from advertising a room rate that doesn’t include all mandatory fees. The bill also gives the FTC the authority to enforce the prohibition and state attorneys general the power to bring a civil action in federal court against violators.

At the same time, there have been whispers that the hotel industry is pushing for counter-legislation that would explicitly permit hotels to charge resort fees. If either of these bills were enacted, they would override any policy decisions made by the FTC.

There’s a lot at stake for hotels. Although there are no reliable numbers on revenue from resort fees, they are thought to generate hundreds of millions of dollars a year for the industry. Removing the ability to quote an initially low rate would almost certainly have a financial impact on the lodging business.

Rosanna Maietta, a spokeswoman for the American Hotel & Lodging Association, says resort fees benefit hotel guests.

“Our industry prides itself on offering an array of amenities and services to ensure guests have what they want and need from their travel experience,” she says. “We work especially hard to make sure they feel comfortable with their purchasing decisions. That’s why the hotel industry provides guests full disclosure for mandatory resort fees charged up front.”

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Is the end near for hotel resort fees?

Maietta says a survey by Axis Research that the association commissioned in April suggests that consumers value resort fees. More than half of the respondents said that they preferred the fee to be “broken apart separately” from the room rate, and 8 in 10 said they were willing to pay the extra resort fees “if the amenities are worth it.”

Sara Rayme, a spokeswoman for the American Gaming Association (AGA), which represents casino hotels, says their guests asked for resort fees because they didn’t want to pay separately for extras such as Wi-Fi, pool usage, gym and spa access, and bottles of water. “Resort fees simply bundle together such amenities, up front, for the consumer,” she says. “As a result, resort fees have provided a much more transparent experience for the customer.”

Rayme said that the AGA is not pursuing any resort fee legislation “at this time.”

In addition to intense pressure from consumer advocates, one of the key drivers of the FTC’s change of heart may have come after Rep. Suzan DelBene (D-Wash.) sent a letter to the FTC in January, asking it to review the agency’s authority to determine that mandatory hotel resort fees are a deceptive and unfair trade practice, as prohibited by Section 5 of the Federal Trade Commission Act. In its reply, FTC Chairwoman Edith Ramirez admitted that it does have the authority to challenge “on a case-by-case basis” specific instances of deceptive and unfair pricing practices.

Experts say that’s what travelers want: decisive action by the government’s consumer protection agency. “I have seen these fees pop up in recent years, starting with Las Vegas and now spreading all over the U.S.,” says Steven Grasso, president of North American Traveler, a tour operator based in Boston. “What most travelers want is to know the price per night, plus taxes. Everyone knows that this is just smoke-and-mirror marketing.”

Tae Lee, the founder of the Los Angeles-based travel planning site Travo.com, says there is a consensus that resort fees need to make a quick departure.

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“Every time I go to Vegas, I have to pay a mandatory resort fee,” he complains. “If legislation passes not allowing hotels to charge resort fees, hotels would put it into the base rate.” That would make them appear more expensive, but consumers would know they are getting the rate that they would actually pay.

Already, some hotels think the time has come to make these fees a relic of the past, along with high phone charges and Wi-Fi fees. Niki Gross, managing director of the Whitney Peak Hotel in Reno, Nev., says guests would be disappointed by a $25-per-night fee.

“It’s somewhat akin to opening a new toy or electronic device and reading that batteries aren’t included,” she says. “Rather deflating.”


Hotel resort fees:

View Results

Loading ... Loading ...
Average Resort Fees
Dec. 2015 – June 2016
City / Region State Dec 2015 Jun 2016 Change
Florida Keys FL $19.95 $24.73 24%
Myrtle Beach SC $8.42 $10.30 22%
Miami FL $20.62 $24.65 20%
Orlando FL $11.93 $13.95 17%
New York NY $23.13 $25.72 11%
San Diego CA $16.20 $17.75 10%
Lake Tahoe CA $15.60 $17.05 9%
Las Vegas NV $23.33 $24.65 6%
Daytona Beach FL $8.21 $8.72 6%
Palm Springs CA $19.97 $20.61 3%
Panama City Beach FL $18.48 $19.07 3%
Fort Lauderdale FL $18.72 $19.19 3%
Park City UT $22.22 $22.77 2%
Orange County CA $13.03 $13.20 1%
Maui Island HI $23.24 $23.32 0%
Breckenridge CO $24.00 $24.00 0%
Aspen CO $28.22 $28.24 0%
Summit County CO $22.50 $22.50 0%
Snowshoe WV $18.09 $17.74 -2%
Oahu Island HI $19.68 $18.87 -4%
Tucson AZ $19.40 $18.65 -4%
Sedona AZ $18.13 $17.43 -4%
Los Angeles CA $13.72 $13.20 -4%
Phoenix AZ $23.92 $22.68 -5%
Average $18.09 $19.52 8%

Source: Resortfeechecker.com


Christopher Elliott

Christopher Elliott is an author, journalist and consumer advocate. You can read more about him on his personal website or check out his adventures on his family adventure travel site. Contact him at chris@elliott.org. Read more of Christopher's articles here.

  • BillCCC

    I fully support Resort Fees as long as they are disclosed up front and optional.

  • Not ‘ban them’, but require that any non-optional fee be quoted as part of the price.

  • Fishplate

    If I can’t rent the room without paying it, it belongs in the initial price quote. And frankly, that includes taxes too.

  • MarkKelling

    Exactly how were those survey questions worded? Or what group of industry insiders took the surveys to get those results? I don’t know of anyone who “asked for resort fees” and I really want to know who are those “8 in 10 … willing to pay the extra resort fees”.

    If the fee is mandatory and cannot be opted out of, it is part of the price and should be reflected as such.

  • MarkKelling

    Suddenly your web pages are overrun with auto play video ads I can’t make stop.
    sometimes 2 or three will play at the same time! This is extremely annoying and is reducing my desire to be here greatly.

  • AAGK

    Who did these groups survey, each other?

  • Rebecca

    Mine have videos too sometimes. My main complaint recently is that I keep getting this ad of an extremely morbidly obese woman, flashing and imploring me to click for an update. It will flash and blink, and the page keeps jumping to this ad.

  • Rebecca

    How can these hotel industry shills defend resort fees with a straight face? I’m surprised they are able to somehow make a statement that customers not only like the fees, but that they asked for them. Come on.

    Their arguments would be valid if it was an optional fee. For example, if you paid only if you used the pool, a towel, the fitness center, asked for a newspaper, etc. Then it would be reasonable to offer a “package” where the resort fee was for these items bundled together, offering a small discount vs each item purchased individually.

    While I don’t like airline fees, at least the airlines have a valid argument that the fees are avoidable. You don’t have to check a bag, order a drink, print a ticket at the airport, etc. But they are marketed and offered as optional.

  • Rebecca

    I thought the same thing. My guess is the survey was worded in a misleading way. I’m guessing most consumers actually would prefer a fee IF they were optional.

  • AAGK

    It’s worse than that. Prior to the resort fee nonsense, a lot of this just came with the room. If the hotel has a gym/pool, the guests can use it. Resort fees rarely seem to include wireless, the hotel just seperates the functional wireless speed from the circa 1994 speed and includes the latter “for free” while charging another $10/day for a faster one anyway. We are basically down to $30 for a bottle of water.

  • Bill___A

    I have never understood why resort fees were allowed in the first place. Adding a “fee” for amenities that someone may or may not use (or may get as a free benefit anyway) then making that fee compulsory is no way to do business.

    We look to our legislators to come up with laws and regulations when industries and / or people become misguided, and this is most definitely the case in this instance.

    The whole idea is to have prices presented fairly to consumers, that is how business is supposed to be done, and governments are supposed to ensure that this happens.

    If every hotel is required to represent their prices properly from the get-go, that is how one would expect it to be, for better or for worse.

    I don’t want to speculate upon whether there would be a drop in business or not. That should not be a part of the discussion at all.
    People who hate resort fees, like me, are likely to increase their business. I have refused to book at a lot of hotels because they have these fees, and if they disappear, then I am likely to do business with them.

    I hope the regulators come to their senses and abolish these fees. They are just plain wrong.

  • Bill___A

    Why not ban them then? It doesn’t make any sense to add a bogus fee to a room rate when it is all room rate…

  • Bill___A

    “Sara Rayme, a spokeswoman for the American Gaming Association (AGA), which represents casino hotels, says their guests asked for resort fees because they didn’t want to pay separately for extras such as Wi-Fi, pool usage, gym and spa access, and bottles of water. “Resort fees simply bundle together such amenities, up front, for the consumer,” she says. “As a result, resort fees have provided a much more transparent experience for the customer.”

    Really? People asked to be forced to pay for all of these separate things whether they used them or not? What about now, when many people can use their mobile phones for internet? What about now, when people carry refillable water bottles? What about now, after they have been increased to be such a big price?

    I can imagine some people might have asked for a “package” deal, did they ask for it to be compulsory for every guest whether they use it or not? I think no…

  • Noah Kimmel

    I believe if there is a mandatory fee, it should be rolled into the rate. Anything else is just gaming the system to look better on the online travel agent sites.

    Any fees can be broken out later if hotels insist on keeping them, but the first price quote shown should be a “bookable” amount, even if it includes limited amenities.

    Taxes, I’m ok with not showing them included as they are government imposed, but should be shown early in the process and well defined (flat vs percentage amounts, each line item)

  • Noah Kimmel

    there could be a multitude of reasons to separate it out internally – corporate vs. franchise payments, award redemption costs, tax implications in some locations, etc. I wouldn’t ban the fee and restrict the business. Focus on the consumer goal, transparency, not the method.

    The first price seen by the customer should be a bookable rate with no mandatory extras. How it breaks down, I don’t care. Any optional extras, good for them.

  • FQTVLR

    I got zapped for a hotel fee at a non-casino hotel in Vegas last year. Among other things it covered a morning newspaper which I actually had to go collect, evening turn-down service but I had to call for that as well, unlimited local and domestic calls fitness center access, etc.

    I noted daily that newspapers were seldom available as they did not have enough for the entire hotel, housekeeping did not come until nearly 4 PM and if I wanted turn-down service (which I did not), they would not be there until around 9 PM. I do not need or use there WiFi and would not use the fitness center. I took all this to the manager the day before I checked out and surprisingly the resort fee vanished from my charges. I wondered how many other people bothered to point out they were not getting anything they paid for.

  • Mel65

    I can’t swim, heaven knows I don’t exercise and I don’t drink a lot of water… now if the resort fees included a bottle of wine….maybe I’d support them.

  • Marc Jordan

    Same thing here. Who were those that were surveyed?

    It’s just like 2009 when Marriott changed their Rewards program by devaluing it by 40%. Their press release stated that the “Enhancement” (their words not mine) was requested by their members in a number of surveys. I wonder which Rewards members asked for a change that required almost twice as many points to be used for a one night stay and creating two new hotel categories.

  • Marc Jordan

    I think the surveys were front loaded. They may have asked “If a property charges separately for local phone calls, a bottle of water in the room and use of the pool, would you rather it be bundled up into a small, single fee?” The survey doesn’t state that the fee can be upwards of $30 a day.

  • Bill___A

    That’s my point, thank you.

  • joycexyz

    Exactly! It’s all in the way the question is presented. I can’t imagine any sane person agreeing that mandatory extra resort fees are desirable. No doubt, the survey left out the word “mandatory.”

  • joycexyz

    Laughable!

  • joycexyz

    No, but he obviously has deeper pockets.

  • BhamPat

    I was in Las Vegas last November with my husband for a meeting. We came a day early, so we paid for that night. However, we arrived late at night, and I saw we had the resort fee on there. I asked them to take it off, since we had arrived so late and didn’t use the fitness center the day we arrived or the next day. (Walking the Strip was exercise enough!) They did without any questions.

  • Bill___A

    Not that reward programs are promoted here, but if someone gets a room “paid with points”, at a hotel with no resort fees, their points take care of it. Resort fees are extra. I could redeem a room for five days in the UK or in Hawaii, but in the UK it would cost me nothing extra, and in Hawaii, it would cost the “resort fees”. This increases my cost of redemption in Hawaii and is both unfair and deceptive.
    Point 2: They write down that the resort fees are “for” certain things. Often these things are not needed, otherwise included, or can be supplied separately more economically.
    The only answer in my mind is to ban the “resort fees”, or if they are so great, sell them as an option.

  • Bill___A

    Dear Hawaii. I spent 77 nights in a hotel last year. I flew over 50,000 miles. Some of it was business and some of it was pleasure. None of the money I spent was in Hawaii. The number one reason I don’t go to Hawaii is resort fees. I have been to Orlando and to Las Vegas – and I have not paid resort fees at those places. Maybe Hawaii and other places should ban these or make them completely optional to the guest.

  • Blamona

    Well this is just a guess, but I think OTAs and outside bookings have to do with hotels adding junk fees. Expedia for example takes up to 20% commissions when booking through them, by having the resorts fees after, that’s 20% less to pay to Expedia of the fees. And we live in a world where everything has these junk fees, utilities, airlines (seat assignment?), everything icloud monthly subscriptions, etc

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