One Online Travel Agency’s Bold Move Against Resort Fees

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 Skift, booking.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?

Conversations (47)
The comments on this page have not been provided, reviewed, approved or otherwise endorsed by any advertiser, and it is not an advertiser's responsibility to ensure posts and/or questions are answered.
Comment as a member

Membership is free and takes no more information than commenting as a guest. Earn status points for good contributions, and see fewer ads as your status grows.

Type your response here.

If you'd like to participate in the discussion, please adhere to our commenting guidelines. Anyone can comment, and your email address will not be published. Register to save your unique username and earn special OMAAT reputation perks!

  1. Loading comments…
Recent Comments
The latest from the OMAAT community.

The comments on this page have not been provided, reviewed, approved or otherwise endorsed by any advertiser, and it is not an advertiser's responsibility to ensure posts and/or questions are answered.

Bhu Guest

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.

0
‼ 0
Bhu Guest

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?

0
‼ 0
Jason B Guest

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.

0
‼ 0
Dr. Stan Guest

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.

0
‼ 0
Bhu Guest

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!

0
‼ 0

Save posts to read later

Saving posts is a member feature. Become an OMAAT member to build a reading list you can come back to from any device.

Become a member
Meet Ben Schlappig, OMAAT Founder
5,883,136 Miles Traveled

43,914,800 Words Written

47,187 Posts Published