Howdy Partner… There’s a new fee in town.
Well, it’s not new anymore, but it used to be.
The Resort Fee. Or Hotel Fee. There are different names for it, but it adds up very quickly. You can sue, or you can know in advance.
I’m sourcing a hotel for a client who is holding his President’s Club outing. Of course, we want a place that has all of the amenities that one wants when rewarding a job well done. We expect higher prices. So, $369, $429, $389 are all expected room rate quotes. Plus, of course, the variety of state and local taxes in different towns. This, we are all used to.
A Mystery? Nope.
Here’s what’s happening:
- $35 mandatory resort fee
- $29 mandatory resort fee
- $45 mandatory resort fee…discounted to $35!
- And my new favorite. 18% hotel fee. What on earth is that? It’s mixed in with the taxes.
If I add all of the hotel’s resort fee inclusions together, here’s what you get for your extra dollars:
- Free admission to the pool and/or gym! Wait..when did we start paying for that?
- Internet access and local and 800 numbers (I get that with my loyalty rewards)
- 2 beach chairs and umbrellas
- Complimentary turndown service (It’s been proven that I can get turned down on my own, thank you)
- In-room coffee maker. Again, doesn’t every hotel on the planet have that for free
- 10% discount in the gift shop. So your $9 bag of Cheetos is now $8.10
What Just Happened?
So here’s what just happened. When you add in tax and your resort fee, your room rate went from:
- $369 to $451
- $279 to $359
- $319 became $421
- And my favorite, because tax plus 18% of $429 is a lot…$549. Your hotel is $120 more than you expected. Per night. For a week. For 200 people. This is a compounding problem.
So why are hotels charging a resort fee instead of raising prices?
Because the average hotel shopper; even the above average hotel shopper, is looking at the base price of the hotel, and you generally don’t see that number until later.
(most people don’t read all the small print)
Because companies like Expedia and hotels.com can show lower prices and the hotel can add the resort fee in said small print.
Because competition for the lowest price and/or best value is fierce
Because the taxes hotels pay on room rate is different than the taxes paid on resort fees
Because resort fees can be allocated by the hotel to any department that is falling short on revenue
So what do we do?
It’s tough to negotiate out, but it can be done. Let’s discuss.