This past week, DC’s Attorney General filed a lawsuit against Marriott regarding their resort fees. This is something that many consumers have been pleased about, given the frustration largely associated with the spread of these fees (known as resort fees, facility fees, destination fees, etc.).
How Marriott’s CEO defends resort fees
In an interview with LinkedIn, Marriott CEO Arne Sorenson shares his take on resort fees following the lawsuit. Not surprisingly, he defends them:
In case you don’t want to see the video, here’s a rundown of his argument:
- He argues that resort fees are the hotel industry equivalent of baggage fees in the airline industry
- He says that when resort fees started a bit over a decade ago, of course they were somewhat financially driven, but it was a way to include things like paddle boarding and bikes with the room rates
- He thinks that resort fees are well disclosed
- Marriott’s approach is that these fees must include a package of benefits that is a multiple of the cost of the fee, and in many hotels that may now include a food & beverage credit, which is often equal to the fee itself
- These fees aren’t going away, but Sorenson acknowledges you can only add these in some markets and some hotels, and not in suburban markets where there may be very limited features they can add
Obviously I strongly disagree with Sorenson, though I at least have to give him credit for not entirely painting these fees in a rosy light. He acknowledges that people might not love them, etc., which is more than the Hotel Association of New York will acknowledge, for example.
Why I disagree with Marriott’s CEO
Marriott’s CEO isn’t offering a very consistent argument here, in my opinion.
First of all, there’s a huge difference between airline baggage fees and hotel resort fees. While most people don’t like airline baggage fees, the difference is that they’re not mandatory — you can choose whether or not you want to check bags. That would only be a fair comparison if resort fees were optional.
Second of all, let’s give Sorenson the benefit of the doubt in claiming that when these fees were first introduced, they were designed to offer value-add amenities like paddle boarding and bike rentals. I think the motivation was entirely profit-driven, but whatever…
How can he defend that logic with the spread of these fees to cities, though? We’ve seen the introduction of “destination fees,” “facility fees,” etc., at a countless number of city hotels.
For example, these have become commonplace in New York City Marriott properties, where the most common destination fee is $30 daily. What do people get? A $30 daily food & beverage credit, enhanced internet, and one tour ticket.
Internet is already included for most guests and I doubt many people are taking advantage of the tour tickets.
So to me this boils down to charging an additional $30 daily for a $30 hotel credit.
Why not just make it a daily $200 destination fee, and include a $200 credit? Surely guests will appreciate that value as well?
This isn’t a unique value add, this is just a money grab:
- Most people would much rather spend money outside of their hotel in NYC, rather than in the hotel
- Typically the credit has to be consumed on a daily basis, so you can’t even “bank” it over days
- Really it’s a way for the hotel to get people to increase spending with them even more, since rarely are people going to spend exactly the credit amount
Resort fees as such are bad enough. But to defend these types of fees in cities, where they’re basically just giving you a hotel credit, is a totally different story. There typically are no unique, valuable features added. They’re just jacking up the room rate.