There’s a new fee to think about. Well, it’s actually not new anymore, but that doesn’t mean it isn’t still causing a few headaches and confusion. In fact, Marriott in DC and Hilton in Nebraksa has recently been sued for not disclosing this fee properly.
The Resort Fee, or Hotel Fee, has a few different names but can add up quickly if you’re not aware of it.
When you visit a hotel website, you will see the hotel’s per night price, before taxes and fees. Internally, the practice is known as drip pricing, because the full price is revealed in little drips and makes a true cost comparison by shoppers nearly impossible.
If I’m sourcing a hotel for a client who is holding her President’s club outing, we want a place with all the necessary amenities. It makes sense to expect high prices, so we are undeterred at prices like $369, $429, and $389. Don’t forget the variety of state and local taxes to account for in different cities. Let’s break it down:
Here’s what’s happening.
- $35 mandatory resort fee
- $29 mandatory resort fee
- $45 mandatory resort fee…discounted to $35!
But now we have to add something else: an 18% hotel fee. What’s this? Did you realize it’s mixed in with the taxes? If you break down the resort fee, here’s what you’re getting for your extra dollars:
- Free admission to the pool and/or gym (When did this start?)
- Internet access and local 800 numbers (do you NOT own a smartphone?)
- 2 beach chairs and umbrellas (What if we don’t like the sand?)
- Complimentary turndown service (It’s been proven that I can get turned down all on my own, thank you very much)
- In room coffee maker (Again, doesn’t every hotel on the planet have this for free?)
- Self-parking (???)
- 10% discount in the gift shop (So your $9 bag of Cheetos is now $8.10!)
All jokes aside, here’s what just happened. When you add in tax and your resort fee, your room rate went from $369 to $451, or $279 to $359, or $319 became $421. Since tax plus 18% of $429 is a lot, your grand total is $549. Now your hotel is $120 more than you originally expected per night…for a week! Oh, did I mention for 200 people? Now THAT is a compounding problem.
So why are hotels charging a resort fee instead of raising prices?
The average hotel shopper, even the above average hotel shopper, is looking at the base price of the hotel and isn’t taking into account the tacked on price until booking. Yes, most people don’t read all the small print.
Companies like Expedia and hotels.com can show lower prices and the hotel can add the resort fee in said small print before you ever realize it. Competition for the lowest price and/or best value is fierce. The taxes that hotels pay on room rates are different than the taxes paid on resort fees, and resorts fees can be allocated by the hotel to any department that is falling short on revenue.
So WHAT do we do?
Negotiating it out is your best option, and it CAN be done. If you’re wanting to see how you can lower those outrageous prices, drop me a line and let’s work it out.