Washington, DC. A swampy city with a surge in scam resort fees.
Washington, DC has seen a 450% increase in the number of hotels that charge scam hotel resort fees in just one year (2016 to 2017). Marriott Hotels, headquartered right in the DC suburbs, has been accused by the Attorney General of Washington, DC of not cooperating with its investigation into resort fees. Forty-six attorneys general from throughout the country joined the suit. So...why does DC allow scam resort fees?
DC has an excellent opportunity to address scam hotel resort fees head on when it considers home sharing legislation this year. We have seen time and time again that hotel scams like resort fees drive DC tourists to home shares. Here's an article about how Airbnb is surging in Las Vegas "due to a backlash to hotel resort fees." If the District wants to regulate home shares in DC, they need to make sure to address the scams that drive them to home shares. Hotels and home shares should have one advertised price and their one advertised price should be taxed the same. This is not rocket science but the hotel lobby is sure not into advocating for an equal playing field.
What hotels in Washington, DC lie about their price to potential customers, charge them scam fees / second room rates when they arrive, and whose scams drive DC tourists away from hotels and to DC home shares?
Mason & Rook Hotel
Liaison Capitol Hill
The Embassy Row Hotel
Washington Court Hotel
One year ago, in the summer of 2016, how many hotels were charging scam hotel resort fees in DC?
Only two hotels.
So what is the increase in the number of hotels charging scam hotel resort fees from just 2016 to 2017?
There has been a 450% increase in DC hotels that do not advertise their true price in just one year.
Does this create any taxing issues in Washington, DC?
Not currently, but there could definitely be complications at any time. Hotels in DC argue that the resort fee / facility fee / amenity fee is an exchange of service. This is a lie. If a resort fee actually was an exchange of service, it would be taxed as a service at the sales tax rate. Hotel resort fees in DC, unlike hotels in New York City, are not taxed at the sales tax rate. Hotel resort fees in DC are currently, at this moment, being taxed a hotel occupancy rate. Hotels are saying that the resort fee provides a service but in reality they are charging a second room rate and taxing the resort fee not as an exchange of service but as a second hotel room rate. So these 11 hotels in DC are not cheating the City of DC of taxes, they are just cheating the potential customers of the hotel by blatantly lying about their advertised price and what they are taxing them for. There is nothing stopping DC hotels from switching though to a sales tax rate seeing as that is what they are telling consumers they are charging them for - a service. If they switched to saying it was a service, it would mean that every hotel in DC with resort fees would be cheating the city of tax revenue every single day. Currently New York City loses over 8 million dollars a year in tax revenue because of hotels ability to cheat taxes when charging hotel resort fees.
What should be done?
Resort fees / second hotel room rates should be banned in Washington, DC. Banning hotel resort fees in Washington, DC would ensure that all of the great hotels that DC has to offer are advertised fairly, taxed appropriately and thus are not driving tourists to home shares. The District should work to attract as many tourists as possible to spend their money throughout the city and at DC hotels, but tourists simply will not do that if they feel they are being lied to by the hotel - and a city that allows these kind of hotel scams.
The DC Attorney General has sued Marriott over resort fees.