Have hotels taken their fees too far?

money2How do you know if hotels have gone too far with fees? When Jay Sorensen complains about them.

Sorensen runs a Shorewood, Wis., consulting firm focused on helping travel companies generate money through surcharges and is a self-described “fee advocate.” But on a recent hotel stay in the Azores, he needed his shirts and pants pressed. A hotel clerk assured him that it could be done the same day.

The bill for ironing three shirts and two pants: $50. “I didn’t know that I had just agreed to rush service – and a big fee,” he says.

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“I know,” he adds. “It’s ironic.”

It sure is. Hotels are eagerly following the lead of the major U.S. airlines, which collected an estimated $11.6 billion in fees in 2011, according to Sorensen. By comparison, the record $1.85 billion that the hotel industry earned through fees, according to a recent NYU study, seems laughably small. But the annoyances can be high, especially when a hotel doesn’t disclose the extras. And the hotel business is trying to catch up to airlines.

As the spring break travel season gets under way, consider yourself warned. Your hotel may have a surprise fee waiting for you when you check out.

Among the most common surprise surcharges: Hotel “resort” fees, or mandatory charges for use of the exercise equipment, wireless Internet access, printing your boarding passes and using the pool – whether you use these facilities or not. These are most common in resort areas such as Las Vegas and Hawaii, but you can find them almost anywhere.

Natalie Haslage, a state government employee in Gahanna, Ohio, says that she’s irritated by the surcharges, not only because they’re mandatory and add to the cost of her stay, but also because they’re not always presented honestly. “Okay, I might use the Internet and I might print my boarding passes,” she says. “But those certainly aren’t worth $25 a day. Also, I love how they say the services covered by the fee are complimentary. Um, it’s not complimentary if I have to pay $25 a day.”

Late last year, after receiving numerous consumer complaints about hotel resort fees, the Federal Trade Commission warned 22 hotel operators that their online reservation sites may violate the law by displaying a “deceptively low” estimate of what consumers can expect to pay for their hotel rooms. But many in the hotel industry were dismissive of the warning, and observers doubt that the federal government will act to stop this form of dishonest pricing.

Bruce Kane, a consultant based in Charlotte, N.C., doesn’t like parking fees, particularly when there’s no way to back out of them. He recently paid $22 for parking at the Hilton Torrey Pines in La Jolla, Calif., which charged him a $22 per day parking fee. “But drive two miles away to the Del Mar Doubletree, and the rates are half – and the parking is free,” he says.

Hotels are serious about these extras. One reader, Ronda Davis, had to pay $34 to park at the Omni Royal Orleans in New Orleans’ French Quarter recently. “My car was there 20 minutes,” she remembers. After she questioned the charge, the hotel dropped the matter.

Another fee annoyance: the daily newspaper charge. Joanne Firby works for a medical services provider in San Mateo, Calif., and on several recent hotel stays, she has received a newspaper without asking for it. She later found a daily $1 charge on her bill. Hotels reveal this charge in the fine print when you check in, but it’s rarely in the form of a direct question, such as “For an extra $1 a day, would you like a copy of the newspaper?”

“They are pretty good at reversing the fee,” says Firby. “But only if you give them the paper back.”

In the past, you might have been able to get a refund at the end of your stay just by claiming that the hotel didn’t offer adequate disclosure. But those days are largely gone. Hotels now inform their guests of the surcharges on their Web sites – though not always as part of the quoted room rate – or on often inconspicuous notices posted at the front desk at check-in, and in the fine print of your folio, which you can sometimes view through the hotel TV set.

Some hotels have also adopted policies designed to run up surcharges. Matt Blumenfeld, a guitarist who lives in Mount Vernon, Wash., says that he now refuses to accept a minibar key when he checks into a hotel. The reason? If he doesn’t have a key, no one can accuse him of taking something from the minibar, which is stocked with overpriced candy bars and drinks. But the industry has found a way around his strategy. “The desk clerk insists that accepting the key is required but that you don’t have to use it,” he says.

Even when Blumenfeld is allowed to refuse the key, he says, “I’ve caught charges for beverages from the locked refrigerator.”

There’s a reason hotels are becoming more inventive and aggressive about fees. “They’re highly profitable,” says Bjorn Hanson, an NYU professor who studies hotel fees. Of the nearly $2 billion the industry collected last year, between 80 and 90 percent was profit.

With numbers like those, it doesn’t really matter what guests think. One look at the airline industry’s fee profits, and the hotel industry’s key players can’t help feeling like laggards.

Like airlines, they’ll introduce new fees gradually, over time. For example, a decade ago. the price you paid for your airline seat included the reservation, a meal and a checked bag. Today, most airlines make you pay extra for those “amenities.”

The fix? When a hotel employee offers you something, assume that nothing is included in the cost of your room and always ask, “How much will that cost?”

But beyond that, the FTC needs to do what the Transportation Department is already doing: It can unleash an army of attorneys and regulators on the industry to ensure that consumers know the all-in rate they’re paying for their room.

Sorensen, the fee advocate who was shocked by a $50 bill for having his clothes pressed, says that not all fees are out of line, but disclosure is a must.

His story, however, had a happy ending. When he complained about his charge, the hotel cut the bill in half.

Have hotels taken their fees too far?

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33 thoughts on “Have hotels taken their fees too far?

  1. I have zero sympathy for Mr. Sorensen. You reap what you sow. You advocate for fees and surcharges; what planet do you live on that you don’t realize that those fees and surcharges will eventually get to the point that even you don’t like them?

    I haven’t had much experience with these fees and surcharges – I mainly stay at Holiday Inn Express – so I don’t know how practical it is to simply refuse to stay at a hotel that plays this game. It sounds as though these “extras” are not disclosed until check-in – or check-out – so it may not be practical to walk away. But, if possible, say, in a hotel-heavy area, my advice is to simply walk out the door, let them know why, and never come back. If they’re all playing the game, well, I guess you’re SOL.

    1. If you walk out at check-in, they may charge you for your first night for a prepaid room or for not cancelling by the required time…

    2. As Carchar notes, walking out at the time of check-in probably leaves you on the hook for the first night’s room and tax for not canceling by the deadline. You can, however, refuse to stay at hotels that charge “resort” fees simply by doing some research of your destination beforehand. With the exception of Las Vegas, where I don’t think there’s a single hotel on the Strip that doesn’t play the “resort” fee extortion racket now that Caesar’s has caved, it’s still possible to find plenty of properties that don’t charge mandatory “resort” fees. You (or your TA) will just have to look around a bit.

      For maximum effect, if you decide not to stay somewhere because they charge a “resort” fee, e-mail guest relations and tell them they lost your business because of it. You probably won’t get a response, but if enough people do that, it might start putting an end to this nonsense.

  2. Most of the fees are BS, But Bruce Kane’s complaint about the parking fees is silly. If you don’t like the price of parking a car, park elsewhere. That’s usually not some hidden fee that sneaks up on you. Also, if you have to drive two miles to find free parking that should be telling. Where land is cheap, parking is free. Where land is expensive, so is parking.

    1. I’ve stayed at hotels where there was a parking surcharge, even though I didn’t have a car. Stayed there exactly once, as a matter of fact.

  3. Looks like KARMA to me. This guy can’t be seriously complaining about surcharges he helped push in the first place.

  4. I don’t consider a charge for dry cleaning, especially same day dry cleaning, to be a “fee” but instead a legitimate charge for an expedited service. And honestly, I think $50 is actually very reasonable. And as a former staff auditor for a major hotel brand in Kansas City, I can tell you that the parking fees aren’t being kept by the hotels, but are often passed through to the company that owns the parking area/garage/facility.

    With all of that being said, “resort fees” just aren’t legitimate. If you can’t provide basic services such a pool, wifi, a newspaper and such with your nightly roomrate, then your roomrate is too low. Period. Don’t nickle and dime your guests.

    1. While I’m sure a portion of the parking fees are passed on, the hotel has to be keeping some of the fee. Probably calling it a “processing fee” or something like that when they send payment to the parking owner.

  5. It’s becoming quite common. Recently stayed @ Sandals La Toc – never again, want “free golf” Oh there’s a slight extra charge, $10 for a caddy. BUT don’t forget to tip him as well. And so it goes with the “slight extra charge”. It became a joke (like the whole place is) with the add ons.

  6. I think the key is transparency. If hotels are upfront and honest about the charges I didn’t have an issue. But don’t tack in on as a surprise charge at the end.

  7. I don’t understand how the clothes pressing charge can be regarded as a “fee”.

    I strongly disagree with mandatory fees, such as “resort fees”. However, the payment for having clothes pressed is in my mind not a fee, but a charge for a service.

    I think mandatory fees such as resort fees should be banned. The reason I think they should be banned is that they say they are for certain “services”. If it were a fee for having a bed, everyone uses it. However, resort fees are for things not everyone uses.

    1. I agree again…having 5 items of clothing pressed is an extravagance not a fee. A fee is something like a surcharge for the electricity. That’s a fee.

  8. While I dislike the fees, especially the ‘Mandatory’ resort fees I find that for the most part the fees are disclosed. In most cases a customer has not read what they have signed.

    In the case of the OP how was he surprised that he had agreed to rush service when he wanted same day service for his pressing? I find that the price he paid for the service that he received was more than reasonable.

  9. The only fee that really gets under my skin is the “resort” fee that is becoming almost ubiquitous in some parts of the country. I disagree strongly with you and Charlie on most of your rants against airline fees, but this one I agree with you on. They are pure evil, and I wish the FTC would do something about these, but I’m not holding my breath. If a fee is mandatory, it should be included in the display rate, period. Listen up, hotel operators – I travel a lot, and will go out of my way to avoid your property if you charge a mandatory “resort” fee, even if it inconveniences me in the process. The one exception I made was for a hotel in San Antonio, which charged a fee of $3 a night that included internet access. That’s a reasonable fee for internet. But the typical $10-25 a night fees are just gouging, in my opinion.

    Hotel parking charges, on the other hand, are annoying, but usually easily avoidable with a little advance planning (assuming you plan to bring a car in the first place). That same hotel in San Antonio showed a charge of $30 a night for valet parking on their website. 10 minutes of searching showed a public parking garage across the street where you could park yourself for $12. The amusing thing is, that $30 a night charge involved the valet parking your car in that very same garage!

    1. I am not even licensed to operate a motor vehicle, and I see little reason why I would want to cost of expensive parking lots included in the price of a room. It is much better to have an optional extra charge for those people who desire to use an automobile in connection with their hotel stay.

      Likewise, I do not have a laptop computer, and I see little reason why I would want the cost of wireless internet service included in the price of a room (unless the cost to the hotel for providing the service was negligible). Better to have an optional extra charge.

  10. $50 for laundry service that a guest requests is one thing, it’s maybe justified, maybe not. He should have asked. But the other charges that appear without any warning are just plain dishonest. I’m occasionally guilty of not following my own rule to peruse my bill and get the garbage removed. Just have to allow 15 minutes to check out which often is a problem and the hotels know it. The unethical behaviour that prevails today is just plain depressing.

  11. A friend is presently staying at one of Miami’s top hotels. He’s here for 6 weeks paying $700+ per night. They are charging him $5.00 per hour for Internet Access for each item: his iPhone, laptop, and his wife’s iPhone. Recently, while driving north on I-95 through Georgia, I stayed in a very nice motel for $67. and they included internet service and breakfast.
    Read the reservation information, ask “Are there any mandatory charges besides the room and tax charges?” and then “vote with your feet,” if necessary.

    1. But what’s the problem?. He stayed at an expensive hotel with hopefully well disclosed charges that he was not required to incur.. You stayed at a cheaper hotel. Sounds like a win-win for everyone.

      The problem, IMO, is when mandatory charges/fee are not disclosed.

  12. Take the time to find out, in advance of checking in, what fees are to be charged or, if you can’t find them on the web site, call and ask. Or at least ask when you check in. Then you can contest them then. I stay at Starwood hotels and resorts. Sometimes there’s a resort fee, which I don’t mind because it’s a minor expense on an otherwise expensive vacation and I use wireless a lot. But Starwood usually will give you a $5 or $10 a day food chit if you don’t have housekeeping come in every day. That helps offset other fees. And last week in NYC at the 4 Points Sheraton, I paid $19 tio have a shirt laundered and a wool vest dry cleaned. Seems reasonable for same-day service in NYC. My Point? Do your research, know what the fees are, and then either negotiate or accept it without whining.

  13. All we can do is write reviews and check them before booking. If the word is out that certain hotels are fee happy, at least we are forewarned and can avoid them.

  14. The format is all screwed up again. If any airline, hotel chain or car rental agency screwed up even half as much as this website, they would be out of business in a heartbeat.

      1. Ed, it isn’t all about money. I’m merely making the point that a website, whose reason for existence happens to be ensuring other companies do things well…is not running all that properly much of the time.

        Sorry if the comment rubbed you the wrong way.

  15. Every hotel/motel room I’ve ever stayed in had an ironing board/iron, or one was easily attained by calling the front desk, so Sorensen could have done the deed himself. It does come across as highly hypocritical for someone who promotes hotel fees to whinge about paying for a service that he himself requested.

    1. VERY good observation. Credit card companies often are hit with class action suits for the most trivial reasons with the lawyers usually pocketing the cash (they get half of a multi million dollar settlement over a poor disclosure of a $2 fee with half the customers getting their money back and the attorneys pocketing the rest). It’s how attorneys such as Jim Edwards made billions.

      These are undisclosed mandatory fees and therefore should be illegal. But certainly they’d lose a jury case if it came up before one.

      Hmmm, another option is to sue them in small claims court. Works if you’re in the same state.

  16. I appreciate learning that if the key to the refrig is refused, I may be able to avoid extra charges. But, are the charges on the snack machines and soda machines going up too?

  17. As MeanMeosh has noted above, the last major holdout against “resort fees” in Las Vegas has caved, with remaining Caesar’s properties starting a resort fee this month. What was interesting in my most recent trip there (besides my last chance to not pay a resort fee at a strip casino) was that for the first time I can recall, one strip resort actually charged taxes on the resort fee.

    I was confused for two reasons:

    1) I recall one of the original motivations behind resort fees was that they were out of scope of hotel taxes… that is, they essentially let a hotel lower the net price of a room to the consumer by only having to collect taxes on the “room rate” and not the “resort fee”. With many weekday room rates in Vegas roughly equal to the resort fee, that’s a 50 percent savings on tax.

    2) Circus Circus charged tax on their (low) $10 resort fee, making it $11.14 per night… the Riviera, $15 right across The Street, did not (I don’t know whether this is due to agreement or settlement, or if a boundary happens to run down the center of the Strip there.)

    If true that at least some jurisdictions have gotten wise to this and modified their tax laws to bite into the resort fee… maybe the resort fee trend will reverse (wishful thinking, I know). Looking at a pretty comprehensive list of Vegas resort fee http://www.smartervegas.com/resortfees.aspx it seems that most Strip casinos mention “and applicable taxes”, while many off-strip properties have that phrase conspicuously absent. The mystery deepens?

    The one good thing I can say about resort fees in Las Vegas is that while they make it a little less transparent what your final price will be, they have made the casino resorts catch up to the rest of the hotel industry in terms of making wifi and local phone calls standard services.

    More annoyingly, I (experimentally) used Expedia’s Hotwire opaque search to book what ended up being the Riviera, and found that not only was the resort fee not disclosed (just a vague “there may be a resort fee”), but the “taxes and fees” that were disclosed were so high (about 50%), that I thought they must include the resort fee, but did not.

    Lesson was to just reinforce my longstanding rule to avoid opaque hotel booking in any area known for resort fees.

    1. My guess is that it is not the “jurisdictions” that have gotten wise (as far as I know, the city would be the smallest taxing jurisdiction), but the hotels to an extra stream of revenue. While they may call it a tax, it is one imposed by the hotel as a way to get more money. It may just be my cynical side, but any hotel dishonest enough to charge a mandatory fee that is not included in the price is dishonest enough to charge tax on a non-taxable item and pocket that money.

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