Setting the Record Straight on Mandatory Resort Fees

The American Hotel and Lodging Association, the mandatory resort fees biggest fans, came out with a new piece on their website today - "Setting the Record Straight on Mandatory Resort Fees." Before you can say aw heeeeeeeeell no, we went ahead and summarized it for you line for line here.  

Here the American Hotel and Lodging Association argues that "transparency and guest satisfaction are at the core of the industry's model." Mmmm, probably not given the massive consumer outcry on resort fees but let us continue. Then they say "That's why the hotel industry provides guests full disclosure for mandatory resort fees up front." Well, that's just a lie. Resort fees are never included in the advertised price. They are usually very difficult to find, if consumers can find them listed at all. Sometimes they are listed as a tax. They are not a tax. Many consumers only find out about mandatory resort fees when they get to the hotel. 

 The Arizona Grand Resort and Spa hides their resort fee as a tax. A resort fee is not a tax

The Arizona Grand Resort and Spa hides their resort fee as a tax. A resort fee is not a tax

 

The Washington Post had an article on resort fees yesterday (6/16/16)  and here's the headline which obviously highlights the transparency problem.
 

The next point the American Hotel and Lodging Association makes is "mandatory resort fees were created in an effort to provide consumers with the best value by grouping amenity fees into one cost." This is not a value. It is a way to separate the room rate into two parts. One part is the advertised room rate used to lure a customer in and book and the other part is the resort fee surprise the consumer receives when he arrives at the hotel.

The Super 8 in Las Vegas has a resort fee. What sort of luxurious amenities does their resort fee offer? It offers more money out of your wallet as a consumer is what it offers. When I called to ask what the resort fee offers the clerk who answered the phone laughed at me, then kept laughing then said "it's just a thing in addition to the room." 
 

 The Super 8 in Las Vegas offers a bed, a color TV and a $12.99 resort fee + tax. 

The Super 8 in Las Vegas offers a bed, a color TV and a $12.99 resort fee + tax. 

Then the American Hotel and Lodging Association goes on to say "this practice aligns with guidance introduced by the FTC in 2012." It does and that is because the FTC, the Federal Trade Commission, only told hotels in 2012 they have to disclose the resort fee. Nothing more. So after that hotels took full liberty to go Where's Waldo on their site with hiding their resort fee. Within the FTC rules from 2012 on resort fees, hotels can advertise a $20 room and then charge guests $30 a night for a resort fee. Indeed, this practice is very common in Las Vegas. Many of the guests do not know their hotel actually costs $50 until they arrive at the hotel. The Federal Trade Commission has done nothing on this issue to protect consumers.

 A $28 a night advertised room with a $29.12 mandatory resort fee. 

A $28 a night advertised room with a $29.12 mandatory resort fee. 

Here is the next part of the American Hotel and Lodging Association piece on Mandatory Resort Fees

Here is a laughable add on where the hotels are trying to blame the tools where consumers book the hotels instead of the hotels themselves for the problem. Here they are saying -  hotels are the ones adding on the resort fees on top of the advertised price but let's totally ignore that and just blame someone else entirely for these mandatory fees. Let's make it - the internet and the consumers who book there!

Hotels are mad that people are using online booking agents like Expedia, Priceline and Hotel Tonight to book their hotels. People use these sites because they can compare prices between hotels.  When customers book on these sites, they take a percentage of the price and pass the rest on to the hotel. The consumer only pays the advertised priced (and then of course gets slammed by a resort fee when they show up at the hotel). Hotels are mad because people are not going to the hotel's website directly to book. If customers did that, then hotels would get 100% of the money. If a customer books on Priceline, they might only get 80% of the money. So here instead of addressing the scam that is mandatory resort fees, they are just blaming the online booking agents (OTAs) because the hotels loose money when consumers want to be able to shop online and compare prices between hotels. 

Every consumer might not know how Priceline makes money but is that the fault of the consumer? Why is the American Hotel and Lodging Association saying it is a problem that the average consumer does not understand how online travel agents make their money? A lot of people do not understand how a lot of things work but you know what it does not have to do with anything here? It does not. They are just trying to get you to ignore the fact that hotels are purposefully advertising one low price but charging a consumer a higher price when they get to the hotel with mandatory resort fees.

Then they allege that online travel agents do not pay taxes but they never say what taxes those are or what this even means. Resort fees DEFINITELY hurt local and state communities because the resort fee is taken away from the room rate - though it should be included - so in a city like New York that has a hotel occupancy tax only the advertised room rate is taxed, not the resort fee. This is a trick the hotels are using not just to deceive consumers but to deprive state and local governments of essential tax revenue.

 We have discussed the way resort fees do not pay the hotel occupancy tax many times before

We have discussed the way resort fees do not pay the hotel occupancy tax many times before

 

Ok so what's the next move? Some infographics. Let us discuss this hot mess.

LOL I too would be happy to pay a mandatory resort fee if my $30 mandatory resort fee it included a free cruise through the Hawaiian islands. Well, no resort fee does include a cruise so it is not worth it.. What do resort fees tend to cover? Faxing, boarding pass printing, print newspapers, local and toll-free calls and other such services that went technologically obsolete by 1998. Being forced to pay for 1-800 calls in the name of a resort fee when every single human staying in a hotel today has a cell phone is truly painful for the consumer. 
 

Next up propaganda by the hotel lobby


Yeah no one doubts that many people have not stayed in a hotel without a resort fee because it is true, most hotels do not have resort fees - yet. The average mandatory resort fee in October 2015 was $24.93, an increase of 30 percent over the $19.20 average resort fee of hotels the year prior. The number of hotels with resort fees grew from 1,191 hotels in December 2014 to 1,671 hotels in October 2015. This is an increase of 40.3 percent. So though a hotel might not have a resort fee now, it probably will if the hotel industry keeps up at the current rate. 

What if a hotel consumer wanted to go to Las Vegas? Every single hotel on the Las Vegas Strip charges resort fees. That is all 62,000+ rooms on the Las Vegas Strip charge resort fees. There is total resort fee collusion in Las Vegas. Where else are resort fees big? Resort fees are big at hotels where they can take advantage of tourists by charging them bogus fees. Sadly it is very difficult to find a hotel around Disneyland or Disney World that does not charge resort fees. From the Best Western in Orlando to the Waldorf Astoria in Orlando, all charge resort fees. This is a truly despicable way of targeting unsophisticated tourists. 

Resort fees are generally not charged at hotels where the majority of their revenue comes from business travelers. Business travelers have options and like to earn loyalty at one hotel. They are unlikely to stay somewhere that charged them a surprise resort fee. If ever charged one, they do not return. Hotels that target tourists know their customers will likely only be there once in their lives so they can spring all sorts of fees and do not need to worry about the customer never wanting to come back.  Hotels know this so they specifically target customers who are on vacation at America's great vacation destinations - Orlando, Miami, The Florida Keys, Las Vegas, San Diego, Anaheim, Palm Springs, Niagara Falls and Arizona are the most likely places for tourists to find a resort fee. 

In terms of that 55% graphic that is some real LOLOLOLOLOL. No one has any idea what a resort fee covers. A very small percentage of hotels will state that the resort fee covers free local calls and boarding pass printing, but most do not list what the resort fee covers. When calling hotels for research into what the resort fee covers, the staff themselves did not know. If it is not listed online, and it is not known by the staff working at the front desk, many staff said that the resort fee was "a credit card processing fee," "a local tax" and "just a thing everyone does." Mmmm, all incorrect. 

Listen, I know there are some problems with polling but this poll is pretty whack. How many people did they interview? Where were they interviewed? Based on the information provided here, it is possible one person who worked at the American Hotel and Lodging Association was polled and these are the results. If you actually look at where customers discuss resort fees, there is NOT ONE CONSUMER EVER who has publicly come out in favor of support for resort fees. Google TripAdvisor and Resort Fee and 100% of the results are about how the fees were hidden or they thought the resort fees were a total scam. Search for Resort Fees on Twitter and you will see 100% of the tweets from consumers are negative. 

YOUR MOVE FTC / CONGRESS. THE PEOPLE ARE WATCHING YOU!