One Online Travel Agency’s Bold Move Against Resort Fees

Filed Under: Hotels

Resort fees and destination fees are an awful trend that we’ve seen spreading in the hotel industry over the past several years. Now it looks like at least one major online travel agency will be taking actions against hotels charging these.

What are resort fees?

Resort fees are additional fees when you’re booking a hotel that often aren’t disclosed in a transparent way. These are “junk fees” similar to airline fuel surcharges.

Why do hotels introduce resort fees?

  • They’re a way for hotels to try and get more revenue without increasing the “transparent” room rate
  • It works out better for the hotel than an increase in the room rate, since they don’t have to pay travel agents a commission on the resort fee; in some areas it also allows them to skirt the typical occupancy tax that otherwise applies on the room rate

What’s awful is that we’ve seen this spread way beyond resorts, and now many city hotels also have “destination fees,” with amenities that are of limited value in exchange for a mandatory inflated fee.

Unfortunately the problem is that once several hotels in a market introduce these fees, they seem to spread really quickly. That’s because on first glance a hotel with a resort fee would appear to be more reasonably priced, so consumers may gravitate towards hotels with lower base rates.

The Andaz West Hollywood now has a destination fee

What can be done about resort fees?

The way I view it, there are a few paths that could potentially lead to hotels reconsidering resort fees:

  • Government regulations that force hotels to only advertise all-in prices, including all taxes and fees
  • Government regulations that require all occupancy taxes also be charged on mandatory fees
  • While I don’t think the government should ban resort fees (I think that’s a stretch), I do think the government should require a certain amount of disclosure, because a lot of hotels hide these fees and mislead consumers
  • Online travel agencies fighting back, and requesting a commission on the resort fee portion of the stay as well, rather than the base rate

On top of the above, consumers can also vote with their wallets, though obviously that hasn’t worked terribly well, because in many cases just about all hotels in a particular market have these fees, leaving you with no options.

Four Seasons differentiates themselves in Hawaii by not charging resort fees

An online travel agency takes a big step against resort fees

It’s not often that I’m rooting for online travel agencies to increase their margins even more, but this might actually benefit consumers. Booking.com has just made a bold move that could shake up resort fees. Either this will backfire for them, or we’ll see other online travel agencies follow suit.

As reported by Skiftbooking.com is now taking their standard commission on all mandatory fees as well, eliminating one of the major reasons that hotels charged these to begin with.

The online travel agency thinks they’re being cheated out of commission, so will take a commission on all mandatory fees. As explained by a booking.com spokesperson:

“As an extension of our overarching aim to provide our customers with transparent information about the total price they will need to pay at a property when they make a booking and to create a level playing field for all of our accommodation partners, we are updating our process when it comes to charging commission on mandatory extra fees that customers are asked to pay at the property.”

The company informed hotels of this policy change late last week, and has said that this will be implemented globally and there will be no exceptions.

There are two ways this could play out, in my opinion:

  • Hotels decide to pull their inventory from booking.com, fearing that if they don’t, this trend will spread to other online travel agencies; then booking.com will have to decide whether to stick to their guns, or backtrack
  • Other online travel agencies could quickly follow suit, in which case hotels may not have much of an option anymore

Regardless of how this impacts the relationship between hotels and online travel agencies, it’s still questionable whether or not it would cause hotels to eliminate these mandatory fees. I fear that without government regulation requiring all-in pricing to be displayed at all times, hotels would continue to charge these to make their rates seem artificially low.

The Andaz Maui charges a resort fee

Bottom line

I’m definitely on booking.com’s team here, and hope that they stick to their guns on this one. It will be very interesting to see how this develops, and to see whether other online travel agencies follow booking.com’s lead, or if hotels will withdraw from booking.com.

While I’d love to see this impact whether or not hotels choose to add resort fees, realistically I doubt we’ll see any major change without hotels being required to advertise all-in pricing at all times.

However, I do think if this change is implemented across the board, it will at least slow the spread of resort fees.

What do you make of booking.com’s move here?

Comments
  1. Bravo! Let’s give everyone commissions on these fees and soon hotels will differentiate themselves by claiming “no extra fees”.

    Next step for hotels will be to advertise free gym access and hot water in all the rooms – all without fees of course!

  2. Doesn’t booking own other search engines like Kayak and Priceline? Does this apply there. If Expedia, et al follow suit, that would be a good chunk of the third party booking universe.

    What would be better for consumers is if these websites did not show hotels with resort fees. That would put an end to the practice too!

  3. Hopefully this is a start to get the conversation around upfront pricing. Would be nice if Hotels at least
    waived resort fees for people who book direct and/or elite members. So frustrating when you realize a 5 night stay is 200 more for the stay than the price you found. Just wastes so much time bc you have to go all the way to checkout to see that actual price.

  4. I still feel that if there is government intervention it would be good to make these fees legally optional. The thing that bothers me the most is how they spin it for access to certain features or benefits, many of which people do not take advantage of. If you want to charge me $50 a day for non-motorized watersports and a free bottle of water, I should be allowed to say no thanks to that.

  5. What would be even better is if when you look at a property on booking.com and other sites they call out the fees. They say “this stay is advertised at $200, but please know that the hotel charges a deceptive “convenience fee” for each night as a way to keep their prices low in theory. Your total for this stay will actually be $310 with the included “convenience fees””. That would be an even better way to address this.

  6. I agree with RCB. The portals need to include a total price that includes the resort fee. That would prevent them from hiding it from the consumer. Some of the hotel sites do their best to avoid disclosing it to the buyer.

    Scottsdale is another victim to these fees. Most of the Hilton properties as of last year were not charging the fee but now they are. Fortunately I’m moving back out there and won’t have to deal with hotels any longer.

    And you’d think the government would be interested in this as well since they are missing out on taxes because I believe taxes are not always charged on the resort fee (maybe I’m wrong) so they are losing money.

  7. The problem with the OTA’s taking a commission on resort or destination fees is that there’s one less segment to complain about them. If an OTA can make a commission, they’ll be very happy for them to stay – for the same reason that the hotels charge them.

    It is indeed time for the government to get involved in this, requiring full disclosure and the additional payment of room occupancy tax or sales tax on those fees. Then we can have a proper, market-based solution when the playing field is transparent. But until then, as Lucky points out, the market is failing….

  8. Why wouldn’t hotels just increase the resort fee to offset this commission? Not sure this is a consumer friendly move.

  9. Hotels will not get rid of resort fees unless there is government intervention. Which there will not be. Hotels charge resort fees when we book directly with them. This is just another way to increase the revenue stream. Increased competition from Airbnb and third parties is not going to stop so neither will resort/destination fees.

  10. These are “junk fees” similar to airline fuel surcharges, since they don’t show as being part of the room rate, but really don’t get you a whole lot.

    They are not like fuel surcharges in that airlines cannot legally advertise their prices without the fuel surcharges. They are obligated to include them, and all other charges, and to state the actual price the purchaser will pay. There are some similarities between hotel and airline surcharges (tax avoidance, for instance), they differ in the critical fact that hotel fees are used to fraudulently sell to the consumer at one price and then charge another price on service delivery, and airline fees are not (not because the airlines are more honest, simply because their pricing is regulated.

    Personally, I can’t see why consumer protection laws shouldn’t be broadened to apply the airline rules to everything, not just travel products. All mandatory fees, etc, must be included in the quoted price, and all legitimately optional fees must be stated and offered for sale at the time of purchase, and the final purchase agreement must clearly state what optional features were not selected.

    This seems like the absolute minimum the government should do. Without it, there’s no level playing field and the marketplace can be expected to function efficiently.

  11. I was hoping to see all OTAs implement a filter to just show me properties that do not include resort or destination fees. This won’t happen now though since they were smarter than me and they’re in the business of collecting commissions so I understand their point of view. It would have been nice though if they would have let consumers show their power with such a filter.

  12. They’re going to get the fee one way or another. No matter what an online booking agency does. They will break it out and charge for parking and other normally included options separately.

  13. Governments should also mandate that all prices, at all stores always are all in, including sale tax, environmental fee etc.

  14. So I have a question. Based on this logic, can I also segregate my income and thus avoid paying tax on things? For example, I could apply a “Rent/mortgage fee”, “Grocery fee”, “Car expenses fee”, “Utilities fee”, etc – you know all the things my income goes to because they’re mandatory. Then I should only be taxed on what’s left (not much.. lol)!

    Because this is exactly what hotels are doing. So if I can’t do this, then the government needs to step in and charge tax (and agents claim commission) on whatever revenue the hotel generates.

  15. Until booking.com and all the others ADD these nuisance fees to the price they display on the result page, nothing matters.

    Why they haven’t done this already is a mystery; aren’t they comparison sises? The first one to do so will get 100% of my business.

  16. @RCB- Exactly, nothing positive in this for consumers until the OTAs start displaying all-in costs.

  17. Another thing OTAs could do would be to allow you to search with some sort of fliter, much like you can do when choosing location or to just search 3/4/5 star properties. Just show me properties with no resort fees. Alternatively, at the top of each listing of properties with resort fees is a big, bolded banner which states THIS PROPERTY CHARGES RESORT FEES IN ADDITION TO YOUR ROOM RATE or something to that effect. Perhaps they could mark each listing with a big red star if they charged the resort fee and a green star if they didnt. I realize that none of those things is likely to happen.

    Proper fee disclosure is the key.

  18. I almost never pay resort fees. I hate them especially at non-resorts where they are simply a scam.

    It may take some digging but most destinations have good alternatives, even in resort fee plagued Las Vegas. For example, the Renaissance Hotel (with pool) directly next to the Convention center is a great property with no resort fee.

    We need to do our homework and let industry execs know that they have lost a stay by being sneaky.

  19. these resort fees are also excluded from calculating any cash back if you use quidco / top cash back etc.

    These fees are just ridiculous charging for stuff that are now seen as essentials (wifi) where previously they were luxuries.

    I actively look for hotels that don’t charge these extra fees. One hotel Ipreviously stayed in the resort fee was getting on for 25% of the total bill!

  20. @phil – evidently not enough. Companies are ruling – do you really want profits-driven entities running the country? Soon there will be a surcharge for “extras” like “oxygen”, or “water”.

  21. It amazes me how quickly people run to “big brother” to protect them. Rest assured, as with almost every other situation, they’ll make it worse, not better.

  22. I just paid the balance on a VRBO booking for a condo in Hawaii. But I’m not done paying….even for a VRBO rental there is a resort fee of $32/day, to be collected upon check-in.

  23. @Daniel Priceline is owned by Expedia. Expedia also owns Orbitz, Travelocity, Hotels.Com, and Hotwire.Com.

  24. @Stanley
    Pretty sure you are incorrect on that one. Booking owns Priceline. And Booking is not Expedia. Booking also owns Kayak and Agoda.

  25. The most ridiculous resort fees are those charged by hotels in Las Vegas, where you get “high speed internet” (which I don’t need due to my mobile roaming plan), and “notary service” which I have never used in a hotel in my life. Curiously, these fees don’t include a chaise lounger by the pool or umbrella against the sun, which is my idea of what a “resort fee” should really cover. But those goodies are optional “guest experiences” to be paid for separately. Maybe we should all just vote with our feet? I find corporate platitudes insulting to my intelligence.

  26. Governmental bodies already standardize approaches to commerce in a wide variety of ways. If I shop for yogurt at the supermarket, I can quickly decide which one I want since the ingredients are required to be listed, and a standardized chart summarizing the nutrition is mandatory. The price of each one is also clearly disclosed on a shelf tag. I don’t see why the pricing of hotel rooms should be any different.

    Unlike the yogurt, which I selected quickly, I have to search through screens, and sometimes go deep into the booking process just to find out that the artificially low price that attracted me was due to a garbage (resort) fee. Sorry, that is very anti-consumer and something should be done!

  27. The problem here is that people book hotels that charge these stupid fees. I never book a hotel that has these fees. If everyone ignore these hotels they would have no guests and they would stop charging these ridiculous fees. If people continue to pay they have no incentives to not charge them.

  28. Airlines take your money for a flight and then charge you a fee to select a seat. You can’t fly if you are not in a seat. Same lame logic that just means more margins and fees and less value to everyone else.

  29. @ Anon — I think that’s a bit different. They don’t force you to pay to assign a seat, as you can otherwise have a seat assigned to you at check-in at no cost. That’s not the case with resort fees, which can’t be avoided.

  30. “The” government — the federal government — can and should require “all-in” prices to be quoted to customers just like airline prices. But getting resort fees taxable would require action in every state and possibly every local jurisdiction; the federal government has no control over sales taxes. While it’s the right move, that would take some time and could, for example, leave you paying resort fees in Scottsdale but not Phoenix depending on what each city decides to do.

  31. @marks

    the Renaissance in Las Vegas now charges a $30.00 destination fee…
    here is what appears on there website when checking hotel rates:

    Please note

    USD 30 daily destination fee added to the room rate includes 2 one-way monorail passes, whiskey/wine tasting and more.

  32. Gov’t reg is the only way to solve this problem. All-in pricing up front like the airlines. I realize people don’t like Super Saver or Slash Saver rates on the search engines, but at least there’s no surprises no matter which “class of room” you book. It’s all there and it would also make hotels keep their resort/destination/sleep/eat/work fee reasonable. I find it atrocious to be charged $42.50/day for wi-fi, one bottle of water, 2 hour bike rentals.

  33. A few people above objected to more government intrusion in our lives. But that’s not what’s being asked for here. The government is not telling hotels how much to charge, or what amenities to include. All that is being asked is that the government require honesty in their advertised price. That’s what governments are for, to create an honest playing field, and then let the informed consumer make their own choice.

  34. @ Mark J: Damn!!! I stayed at Renaissance LAS twice not long ago, both great stays, suite upgrades and no nonsense fees. I guess I’ll have to take my business down the street and drop a note to the GM. Possibly Marriott might care that their Elites are staying elsewhere (although I doubt it).

  35. A government rule that the fees either be built into the rate or be optional for the guest to decline would fix this issue overnight. Hotels know they give you a bunch of nearly worthless perks for the fee. They’ll either price them to have genuine value or eliminate them and raise rates accordingly to a fair value.

  36. Expedia.com could easily show all costs including fees and taxes for each hotel on the search results page. They ALREADY do it in the UK where it is now required by law. I actually use a Google chrome extension on the UK site then book on the US site. Much more time efficient. That the US sites dont suggests that they are getting paid by the hotels or believe they make more money not doing it.

  37. So, what is really, really annoying is that at most “resorts”, ie with amenities like pool, private beach….. The resort fee covers amenities that are included for elite members (I am Ambassador Elite on Bonvoy and Platinum on IHG). So far I have “lucked out” in getting resort fees waived as an Elite member.

    However there should be laws against “undisclosed resort fees” and there must be standards when resorts cannot be charged. Example is High category Bonvoy and IHG charging $35 to $50 “resort fee” around Times Square when they don’t have swimming pool nor adequate lounge facilities. Yes there might be a portion of the fee to be food and beverage credit, but then they upped the breakfast to $40/per person,p…..

    I would like to see some lobbying by people like OMAAT where we send letters to CEOs of hotel chains to add waiver of resort fees for Elite members at the least.

  38. I’m all for transparency and agree that mandatory resort fees are misleading and should be included in the nightly rate quoted. I’m curious how booking.com plans to collect the commission on the resort fee. I own a traditional travel agency, commissions are paid by the hotel after the client’s stay. The hotel determines the rate used to calculate the commission and the big chains now take a “processing fee” out of each commission. They can send all the invoices they want for commission on resort fees but will not be able to collect.

  39. I think “resort fees”, “destination fees”, “amenity fees” or similar fees by any other name, are a thoroughly disgusting scam on the part of hotel operators, and I am glad to see “booking.com” striking back. I hope this rapidly spreads to all other online booking engines. If those scammy hidden fees are no longer hidden, then there is no longer any reason for them to exist, as they will become visible as exactly what they are, an increase in the room rate without any increase in real value.

    Bravo to “booking.com”. Now, how about you, Expedia, Travelocity, Hotels.com and all the rest of you online booking services?

  40. Last week, I booked the Intercontinental in LA through Agoda. No resort fee showed at any stage (I wasn’t aware there was one) and the non-cancellable booking was charged up front by the hotel.

    Luckily, my bank queried the transaction instead of just approving it, which is when I realised that the amount being claimed was greater than the quoted rate by Agoda.

    I immediately cancelled the booking and was then told by Agoda that it could not be cancelled, despite me telling them that they were being fraudulent by quoting one fee and charging another. They would not accept there was a problem.

    I then heard from the Intercontinental to tell me that my card was declined, so I told them why. They also would not have it and insisted that I pay. They even sent me copy correspondence from Agoda (owned by Booking. com) where Agoda told them I was cancelling because I had found a cheaper deal elsewhere, which was a blatant lie!

    The hotel explained the breakdown and that was the first I heard of the ‘Facility Fee’.

    Fortunately, I had a printout of the original Agoda reservation, which broke down the price, but did no include the Facility Fee.

    The hotel agreed there was an error and agreed to cancel.

    I asked what the Facility Fee was for and, if I didn’t use the facilities, would it be refunded and, if not, why was it not just quoted as part of the room rate. No answer received.

    I was very lucky that my bank queried the transaction, otherwise I would not have seen the price charged until my next statement, after the stay!

    This is very sneaky and I am surprised that there are no regulations to prevent this.

    I’m in the UK and we do have all-in pricing as compulsory, but Agoda seem to have not heard this!

  41. Re: Agoda
    I have found on my last bookings through AGODA that the price given to get you to make a reservation is NOT the price on the final booking confirmation, which is of course always HIGHER than the come-on price. This happens without mention of any “resort fees” so I imagine it is a charge directly to Agoda, and not a hotel-originate fee.

    Talking with my feet is the only remedy I have found. But as BHU details, it is almost impossible to cancel the reservation once made.

  42. These fees also erode elite benefits. The free bottle of water for elites at San Francisco Hyatts is now included for everyone with the destination fee, and for some reason they’re not terribly proactive at getting them out anymore. The Grand Hyatt promises a $10 daily food/beverage credit, but it doesn’t get applied automatically if you use the app to check out. And Hyatt corporate doesn’t know about each hotel’s individual rules. Also your folio now gets twice the number of lines for taxes, as for some reason they get applied separately to the destination fee. This makes it fun when it comes time to submit your expenses.

  43. UPDATE
    I chased the LA Intercontinental for a reply:

    We apologize for the delayed response. Please be advised that the hotel facility fee is a mandatory fee that is applied to all our guests. Below is the outline of the details.

    “Facility fee Includes: 

    -$20 daily F&B credit

    -24-hour access to Attitude Fitness Center including Sauna, Steam Room +1 guest

    -Entry to Spire 73 – tallest rooftop bar in the Western Hemisphere +1 guest

    -High-speed wireless internet access 

    -Domestic and international calling*

    -Guaranteed seating in La Boucherie – Wine Spectator Award Winning Steakhouse

    *international calling up to 30 minutes daily”

    This was never made clear before.

    I have now asked them why, if it is a mandatory, it is not included in the Room Rate automatically. And, if I don’t use any of these, do I get a refund?

  44. Further Update after u asked if it was refundable in white or in part, depending on what a guest used:

    “Unfortunately, facility fee will not be refunded as it’s a mandatory fee applied to all of our guests effective march 15, 2019 per hotel policy. In regards to the Wifi, fees were applied except for our IHG rewards members. Lastly, our fitness center was complimentary for all our guests. Please kindly note that this was a policy change from the management and we’ve decided to offer additional benefits, such as the $20 daily food and beverage credit, guaranteed sitting at the La Boucherie, and more.”

    So if its compulsory, how is that different to the price for a room? Surely, the only reason is to mislead and deceive people, which nearly happened to be me.

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