Resort fees started out as a nuisance in markets like Las Vegas and have grown into their own beast. Vegas is a great example of a market where resort fees are clearly out of control. There are plenty of instances in Las Vegas where the resort fee can be as much or more than the room rate. Customers are frequently surprised by the resort fee when they check-in at hotels, especially if they’re not paying enough attention during the booking process.
Recently, Booking.com made a change that caused a stir in the hotel industry. The online travel agency started charging a commission on the resort fees hotels charge. The current industry trend is that online travel agencies only charge a commission on the base nightly rate. When resort fees were first becoming popular with hotels, they didn’t represent a big portion of the room rate nor were they widespread. Today, they are bigger and much more prevalent.
A recent Skift article addresses the change that Booking.com instituted and also quotes an Expedia executive, Cyril Ranque in regards to that company’s plans on resort fees:
He said Expedia has not changed anything about its commission collection policies, and pointed out, “we are hearing, despair, high concerns from our hotel partners. We’re trying to get as much information as we can.”
Ranque goes on to offer an opinion on resort fees and how customers perceive them, stating something that seems pretty obvious:
“They think they had a price,” he said. “They book it and then all of a sudden they get hit by a series of fees that the customer has no choice in paying. So that’s why when we really think about the health of the travel agency business, it’s not really good to not tell the customers in a clear way.”
Not Everyone Hates Resort Fees
I think you’d be hard pressed to find too many folks who think customers like resort fees. Thanks to the good folks at Skift for reaching out to Vijay Dandapani, the CEO of the Hotel Association of New York City. Vijay has a contrary view to the opinion that resort fees are a customer annoyance:
“Resort and urban fees provide real tangible value to the guest and there is plenty of empirical evidence that a majority of guests have no problem with it, and appreciate the value offered,” Dandapani said. “Booking’s adding a commission to that is akin to tacking on a charge on to a range of other products and services guests consume at a hotel after checking in, and will only increase the cost to the consumer while unfairly penalizing the largest customer base: hotels.”
Well, then. I can’t really imagine how rational minds could agree with this statement. It wouldn’t shock me if the evidence he cites to prove that a majority of guests have no problem with resort fees is the fact that customers pay resort fees. They’re required to pay them. No choice in the matter.
As to the real tangible value of resort fees, they’re mostly comprised of benefits some hotels have always given away for free (airport shuttle, newspaper, bottled water). Many hotels make a habit of including throw-away items that they’d otherwise be providing to justify a resort fee. Still other hotels don’t even bother justifying the fee, just lumping it on top of the room rate with little or no explanation.
The Final Two Pennies
Mr. Dandapani and I do see eye to eye on one thing. He describes Booking’s decision to charge commission on resort fees as a move that “will only increase the cost to the consumer”. As I said a couple weeks ago, I don’t agree with some of the folks who think that Booking’s move might be a catalyst for hotels to start eliminating resort fees. Rather, I think it’s quite possible that hotels pass on the commission as additional expense to customers.
Wonder where they’ll end up baking it in? The resort fee, of course.
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