FREQUENTLY ASKED QUESTIONS ABOUT RESORT FEES
Q: Why are Resort Fees bad?
A: Resort fees are bad for many reasons.
- Resort fees are meant to deceive consumers by breaking the room rate into two amounts
- Resort fees deprive local and city governments of essential tax revenue
- Nothing is stopping hotels from advertising a $1 room rate and a $99 resort fee.
- In fact, the Excalibur and the Circus Circus in Las Vegas currently offer thousands of rooms where the resort fee is more than the advertised room rate
- Resort fees specifcally target tourists that hotels can take advantage of
- Resort fee hotels completely surround Walt Disney World and Disneyland
- Resort fees allow hotels to advertise a free night for a room as a promotion, but in reality charge the resort fee daily making the room not free at all
- Resort fees do not allow customers to use online tools (Priceline, Expedia, Hotel Tonight, etc) to compare the price of a room since resort fees are left out of all price comparison tools
- Resort fee collusion exists in places like Las Vegas leaving the customer with no option of going to a hotel that does not break its room rate into two parts.
- Since staying somewhere without a resort fee is not an option on the Las Vegas Strip, no market solution is possible.
- Resort fees are mainly charged in locations that have many foreign tourists. Here the hotel knows that they can take advantage of people who do not speak English, have never seen a room rate broken into two parts, and are confused about why they have to pay more to get their key at the front desk.
- Customers often do not know about resort fees in advance.
- Many hotels hide any listing of a mandatory fee on their website. They leave the resort fee off of price comparison tools like Kayak and Expedia and some hotels list their resort fee as a tax. It is not a tax.
- Resort fees do not provide a service. They are just a way for a hotel to break their room rate into two parts.
- Resort fees are found at hundreds of hotels with no resort services like the Super 8 in Las Vegas or the Best Western in Orlando.
Q: What is the goal of Kill Resort Fees?
A: Kill Resort Fees wants to see the advertised price of the hotel include all hotel-imposed mandatory fees.
Q: How much money do resort fees bring in for hotels?
A: Dr Bjorn Hanson of New York University said mandatory hotel fees brought in 2.47 billion to the hotel industry in 2015.
Q: What is the average resort fee?
A: The average resort fee in 2015 was $24.93 according to a 2015 study by Travelers United.
Q: How many hotels charge resort fees?
A: As of October 2015, 1,671 hotels charge resort fees. This is an increase of 40.3 percent over the 1,671 hotels that charged resort fees in December 2014. These numbers are from a October 2015 study by Travelers United. A major study has not been commissioned since then but fifteen NYC hotels had resort fees in July 2016. In July 2017, 42 NYC hotels have resort fees. There has been an incredible increase in the amount of hotels across America with resort fees in just one year.
Q: Do resort fees pay for a service?
A: No. Resort fees are mandatory fees so they are more like a second room rate than an exchange of a service. Hotels with resort fees do not allow a customer to refuse those services in order to avoid the charge. Hundreds of hotels with resort fees are not resorts. Resort fees are found in many two-star hotels.
Q: I want to know everything in the world about resort fees. Does Kill Resort Fees have a white paper?
A: Why yes, yes we do. Please click here to download it.
Q: Do resort fees have other names?
A: Yes. Hotels use names like destination charge, amenity charge, service charge, urban fee or resort charge for the same scheme of breaking the room rate into two parts. One that the hotel advertises and the guest often pays up front online and one that is paid at the hotel in the name of a mandatory fee.
Q: Where are the hotels that charge resort fees located?
A: They are often found in locations where hotels know they are dealing with unsophisticated tourists that they can take advantage of. They are rarely found in hotels where the majority of customers are business travelers.
Q: If people hate resort fees so much why don't they just stay at a hotel without one?
A: That is often not an option. Resort fee collusion exists in places like Las Vegas leaving a customer with no resort fee alternative. All 62,000 rooms on the Las Vegas strip charge resort fees.
Q: I don't travel. Why should I care?
A: Resort fees allow hotels to cheat state and local authorities out of essential tax revenue. Often only the advertised hotel price is subject to the hotel occupancy tax. Since the resort fee takes part of the whole price of the hotel out of the tax equation, that is a lot that is being left out of tax revenue that is supposed to go to pay for the roads and schools around you. Resort fees are often taxed at a lesser sales tax rate, even though they are the second part of the room rate.
Also it would just be great if we could all make sure hotels were not being dicks to people who want to see our great country. Having a family fly from Italy and pre-pay for there trip online only to find out they owe an extra $250 to get their key when they get to their hotel in Orlando is just a serious dick move. Or what about Jim Bob who drives his 13 kids in from a corn field, USA to show up in Vegas and be charged a surprise $300 for the week to check in. No one should support such an awful policy.
Q: Is the government going to spend any money by banning resort fees?
A: No. The government would spend $0 if they banned resort resort fees. What would happen, is that the true hotel price would be charged the proper hotel occupancy taxes. Meaning the full hotel rate - one that formerly might have gotten broken into two parts (an advertised room rate + a resort fee) - would be taxed fully for occupancy taxes so state and local governments would receive the taxes meant for these hotel rooms.
Q: How do resort fees deprive state and local governments of essential revenue?
A: Hotels that charge one advertised rate and one resort fee instead of charging just one total hotel price are not allowing the whole price of a tourist's stay to be calculated into hotel occupancy taxes. Since a portion of the room rate is left out of the tax calculation, that part of the room rate is lost tax revenue. The Row Hotel in New York City advertises a $223.65 hotel room on their website. The hotel has a $25 facility fee. So a pre-tax hotel room at The Row costs $248.65. That is the amount that The Row should be taxed at to calculate the New York City occupancy tax. Yet, because $25 is missing from the total cost of the hotel, the entire price of the room is not subject to the occupancy tax. The resort fee at The Row in NYC is only being charged the New York City sales tax. The facility fee / resort fee/ second room rate at The Row Hotel is only subject to 8.875% taxation. The advertised room rate is subject to the 14.75% NYC hotel occupancy tax. New York City loses 5.875% on every single resort fee in every single room in the City. This (as of July 18, 2017) comes out to NYC losing $8,826,397.21 in tax revenue per year due to hotel resort fees.
Q: How do resort fees relate to home sharing sites like Home Away and Airbnb?
A: We have found that many tourists are often so confused by hotel resort fees that they turn to home shares. Tourists want to see one advertised price for their stay and pay that price (+ taxes). Resort fees allow hotels to avoid paying taxes that could be used for affordable housing programs. We recommend that cities that are tackling regulating home shares like Airbnbs, make sure that hotels are held to the same taxing and advertising standards. What's fair is fair.
The American Hotel and Lodging Association (the hotel lobby) has had a crushing impact on regulations regarding home sharing across the country. They want to greatly reduce their home share competition, yet they do not want hotels themselves to be regulated. So far they have worked very diligently (and paid many local politicians) to make sure that hotels have been left out of the debate about who is contributing to affordable housing issues and taxation problems related to home shares. We urge City Councils across the country to think beyond the narrative framed by the hotel lobby and make sure that hotel issues - like resort fees - are directly dealt with in the same bill regulating home shares.
Q: Resort fees are usually disclosed though so shouldn't people know?
A: No. Resort fees are purposefully hidden by hotels. Resort fees are not included in the advertised price of the hotel. Since resort fees are not in the advertised price of the hotel, they are left out of all third-party booking sites like Priceline, Hotel Tonight and Expedia where people often search to compare the price of hotel rooms. No online tool is available to compare prices with resort fees because those tools are searching for the advertised hotel room rate.
The Federal Trade Commission in 2012 said that hotels have to disclose resort fees. Most hotels now do list that they have a resort fee, somewhere, anywhere on their website generally in microscopic print, if at all.
Likely, you will have extreme difficulty finding the resort fee. Hotels have taken extreme efforts to hide their mention of a resort fee on their websites. Resort fees are often hidden as a tax on hotel websites. Resort fees are not a tax. They are sometimes listed in the Terms & Conditions in a hotel's website. Sometimes they will appear on one screen of the hotel's direct booking page only to disappear on the final booking page. Many hotels only allow you to see the resort fee info after you've already begun the booking process and have entered your credit card.
And of course, resort fees are left out of all price comparison tools by third-party bookers (Priceline, Kayak, Hotels Tonight, etc) since they are not part of the advertised room rate. If you use Priceline's Name Your Own Price or Hotwire's similar tool (Hot Rate Hotel), you can bid for a $20 hotel and get one, only to be charged a $30 resort fee on top of that when you get to the hotel.
A few hotels do list their resort fee on every page of the booking process. Even at the hotels with the best transparency, the font of the resort fee is usually 25% of what the advertised rate is and the hotel still does not include the resort fee in the advertised price.
Q: Why don't third party booking sites just list the price with resort fees?
A: With the way they are currently set up, they can't really. Third party booking sites like Expedia (which owns Hotels.com, Orbitz, Trivago, Egencia, Travelocity, Hotwire, and Venere) and Priceline (which owns Booking.com and Agoda) and Hotel Tonight are all set up to search for the advertised price of a hotel room. Since a resort fee is not part of the advertised price of a room, it is not included in the search.
Hotels specifically started charging resort fees to recoup lost revenue due to the increase in people using third-party booking sites. If Jane makes a reservation for a hotel on Priceline, she might pay $100 to Priceline to secure her reservation. Priceline then would take a certain percentage, let's say 25% here - so $25 - just as a hypothetical example, and then pass $75 on to the hotel. The hotel then would charge $25 at the front desk in the name of a resort fee. The hotel collects 100% of the resort fee purposefully leaving Priceline out of the process. Then the hotel is back to collecting $100 on that room rate. In reality, the hotel costs Jane $125.
If Hotel Tonight hypothetically started putting the resort fee into the actual advertised price of the hotel, they'd have to change the whole way their company worked. If they advertised the $125 hotel rate but Priceline and Expedia did not, then people would just all go use Expedia and Priceline because the hotel looks cheaper there. Furthermore, there is no incentive for the third-party booking sites to list the resort fee because they only receive a commission on the advertised room rate. Why would they use their resources to collect money on a fee that they receive 0% of? They would not. Third-party booking sites generally deal with this resort fee problem by saying that all of the rooms on their site could be subject to mandatory hotel fees in their fine print.
Q: How do resort fees affect travel agents?
A: Resort fees take profit away from travel agents. Travel agents earn their commission by booking the listed room rate for the hotel. Travel agents do not collect commission on taxes or fees. Furthermore, travel agents have a hard time keeping up with the ever increasing use of resort fees by hotels. If a travel agent gives a customer the wrong price of the hotel such as only the advertised price and not the resort fee, the tourist could come back and sue the travel agent. Travel agents are greatly concerned as they find it hard to figure out how to properly quote a hotel price to a client.
Q: Do you really have to pay a resort fee?
A: No. Since a resort fee is not part of the advertised room rate, you do not have to pay. Just submit documentation that the resort fee is not part of the advertised room rate to your credit card and dispute the charge. For more information, check out our info on that here.
Q: Who is supporting resort fees?
A: The American Hotel and Lodging Association and the American Gaming Association.
Q: Who supports the elimination of resort fees?
A: Kill Resort Fees, Travelers United the National Consumers League and anyone who has ever stayed at a hotel with a resort fee. Seriously, check Twitter or do a Google search. No tourist has ever come out publicly in favor of resort fees. Ever.
Q: I stayed at a hotel with a scam resort fee and I am outraged. What can I do?
A: We recommend five quick things!
1) Contact the FTC and file an FTC complaint about how you thought the resort fees were a scam. File your FTC complaint here: https://www.ftccomplaintassistant.gov/
2) Contact your elected representatives. Every email and call to your Senators and Congressperson helps!
3) Make sure to reach out to your local newspaper and TV news stations. Many TV news stations have investigative reporters that look into fraud complaints from viewers. Resort fees have gotten a lot of attention this way, so please help spread the word!