New Yorkers Will Lose A Million Dollars of Tax Rev due to the Marriott Marquis' new resort fee

The Marriott Marquis in New York City added a hotel resort fee. On September 1, 2017 the hotel added a "destination amenity charge." This fee breaks the room rate into two parts. One part is the advertised room rate, the second part of the rate is hidden as the fee. This creates numerous policy issues that everyone should care about.

First and foremost, this fee exists so that the Marriott Marquis NYC can lie about their room rate. Now with this split rate, the hotel will seem less expensive to tourists using comparison shopping tools like Booking.com, Priceline or Expedia. This fee is meant to deceive customers and has been called harmful to consumers by the Federal Trade Commission. Forty-seven Attorneys General started an investigation into this practice of resort fees in May 2016. Marriott refused to cooperate and was recently subpoenaed by the DC Attorney General. Despite this recent investigation, the Marriott brand took a stand by adding these scam fees to their largest property in New York City. 

These fees do not just lie to tourists, they also cheat New York City. In New York, only the publicly advertised room rate is charged the hotel occupancy tax of 14.75%. Anything else is charged the sales tax of 8.875%. That means that a room that previously cost $225 was taxed at a rate of 14.75%. Now, with this split room rate, the hotel will tax a room advertised at $200 14.75% but the other part of the room rate, the $25 destination amenity charge, will only be taxed 8.875%. The Marriott Marquis has 1,949 rooms. This means that New York City loses $1.47 per night per room every single day that the Marriott Marquis charges this scam fee. That is $1,045,735.95 per year. So this scam fee definitely does not just cheat tourists, it cheats New Yorkers of over one million dollars of tax revenue per year. 

The hotel resort fee at the Marriott Marquis in New York City has even further policy implications. These scam fees are meant to confuse tourists. Tourists cannot figure out what a room rate even costs. This confusion leads them to hotel alternatives like Airbnb and HomeAway where the process is standardized throughout the world. Resort fees and destination amenity charges directly drive tourists to home shares.

In addition, travelers at the Marriott Marquis NYC will likely think this 25 amenity charge is actually paying for services in the hotel. It is not. The fee is simply a hidden part of the advertised room rate. Because tourists think they are paying for service, they are less likely to tip housekeepers. Housekeepers should be tipped. The hotel that employs them should not be actively working to add policies that reduce the number of tips they receive. 

New Yorkers deserve more than a hotel that cheats them of over one million dollars of tax revenue per year. Essential services are so needed at this time of year and it is sad to see the Marriott Marquis NYC cheat New York of the revenue that could be used to help the homeless, pay the police and keep affordable housing programs going. It's time to ban the hotel resort fee scam. 

nycmq_innovation_home01.jpg

The Marriott Marquis in New York City has split its room rate causing an one million dollar loss of tax revenue to the city. Photo Credit: Marriott Marquis NYC