We’re used to the concept of hotels charging aggressive “destination fees” or “resort fees,” in an effort to maximize revenue. In Las Vegas, you’ll even see some properties with resort fees that are higher than the room rate. However, I’ve never seen anything quite like what’s going on in Chicago, as flagged by View from the Wing.
The Chicago Hotel Collection’s strange room rates
The Chicago Hotel Collection is a collection of four otherwise independent hotels in Chicago. The company’s website is quite interesting. For example, if you quickly just scroll through the homepage, you might assume that the hotels have won a bunch of awards, but really the website is just promoting how Chicago has been voted the best big city in the United States for nine years in a row.
But that’s not what’s most interesting about the hotel collection. Instead, what’s most remarkable is how the rates are structured — all the properties have really low room rates, and then absolutely massive resort fees. Well, in some cases they’re referred to as resort fees, and in other cases, they’re described as “the all-inclusive package” (which… isn’t actually all-inclusive, but that’s besides the point).
For example, take the River North property, where you’ll see rates as low as $16 per night in the calendar.
But then when you click through, you’ll see the rate is a minimum of $120.11, and that includes the $104.95 nightly resort fee.
That resort fee includes things like two complimentary cocktails each night, a $10 nightly dinner credit, and “exclusive local and worldwide perks” (how generous!).
In fairness, the above property seems to be exception by showing the rate without the resort fee in the calendar function. For the other three properties, the calendar shows the rate inclusive of all mandatory fees. For example, take the Gold Coast location, where the lowest rate shown in the calendar is $143.
When you click through, you’ll see the rate is actually as low as $130, and that’s inclusive of the $125 nightly resort fee.
That resort fee includes things like a complimentary breakfast buffet for two, two complimentary cocktails each night, a $10 nightly dinner credit, access to the gym, and more.
What’s the real motive for these hotel rates?
So, why do these Chicago Hotel Collection properties have such low room rates and such high resort fees? There are two explanations that are most likely.
One explanation is that the hotels are simply trying to deceive consumers, by displaying very low rates early on, and then having those rates go way up with the resort fees. Personally, I actually don’t think this is a primary motive.
Yes, one hotel displays the pre-resort fee cost in the calendar function, but that almost strikes me as a glitch more than anything else, since only one of the four properties does that. Hotels are supposed to display rates inclusive of all mandatory fees from the beginning of the booking process, so that’s something the company should get fixed.
Personally, I think there’s a much more likely explanation. These properties don’t have much name recognition, so I imagine that a large percentage of bookings come through online travel agencies. Online travel agencies charge absolutely massive commissions… but those are based on the room rate, and aren’t based on the resort fee.
So if the hotel has to pay 10-30% of the room rate to a third party, I imagine they’d rather that be on a total of $5 rather than on a total of $130. 😉
While free breakfast is nice, that’s also something you’ll find at many limited service properties. Meanwhile the other perks almost seem designed to get people to spend more. A $10 dinner credit isn’t going to get you a meal, and is almost a smart incentive to get people to even visit the restaurant. While you could in theory drink your complimentary cocktail, I imagine that many people order a second one, or accompany it with some food.
This is even more extreme than what you’ll find in Las Vegas, so it’s quite an interesting approach for this hotel collection to take.
Bottom line
The Chicago Hotel Collection includes four (otherwise independent) hotels in Chicago, and they all have one thing in common — they have really low room rates, and massive resort fees. We’re talking $5 room rates with $125 resort fees. I’ve never seen anything quite like this before, and it even puts to shame what you’ll find in Las Vegas.
I have to imagine that the primary motivation here is to limit commissions for online travel agencies (since that’s based on the room rate exclusive of resort fees), but who knows…
What do you make of these very unusual hotel rates?
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