- What the heck is a resort fee and do I have to pay it?
This is a question I get asked over and over again,
particularly, on my Las Vegas travel series
and so I wanna take some time to talk about resort fees,
what they are, how you can spot them,
and potentially, how you can avoid them.
So resort fees, they can come in many different names.
Sometimes it's called a resort fee.
Other times it's a destination fee.
Other times it's an amenity fee.
Whatever it is, this is all the same fee.
It is the fee that is added on per night by the hotel.
It is in addition to the room rate
and it is in addition to taxes.
Resort fees are not taxes.
They are not put there by the government.
They are put there by the hotel
and the profit on resort fees goes entirely to the hotel.
Resort fees can range anywhere from 10 to $50 a night.
I've even seen some hotels in Florida
that charge a $100 a night per the resort fee.
Sometimes, resort fees can be even more
than the room rate itself.
This particularly happens in Las Vegas,
where you'll book a hotel, like the Circus Circus,
with a $19 a night room and a $25 resort fee.
And I mentioned Las Vegas.
The city that resort fees are most prevalent in
is Las Vegas, where all 62,000 hotel rooms
on the Las Vegas strip are subject to resort fees.
When you check into a hotel that has a resort fee,
if you ask them, "What is this fee?",
they'll typically tell you
it includes a bunch of amenities in the hotel.
For example, it includes pool access.
It includes pool towels.
It includes gym access.
It includes surfboard rentals.
It includes the coffee maker in your room.
It includes the coffee for the coffee maker in your room.
It includes a water bottle to use
in the coffee maker in the room.
These are basically a lot of things
that used to just be free
and used to be included in your room rate,
but now, they've taken these things
and just said "Well, it's not your room rate
"that pays for these things.
"It's now this resort fee that pays for it,
"that you can't opt out of."
You can't say, "I don't want to use any of those things,
"so don't charge me the resort fee."
The hotel makes you pay the resort fee,
whether you use those things or not,
but they do give you access to those things.
Very nice of the hotel.
So the thing that's most irritating about resort fees
is they are often not advertised very clearly.
Oftentimes, they're not advertised as resort fees at all.
Some booking engines don't show them.
Now, this has been getting better over the years.
More booking engines show them.
More hotel websites show them.
But still, they don't show up
at the beginning of the booking process,
when you look at the room rates
or when you're looking at a search engine
and you're sorting by price.
Instead, the resort fees show up
all the way at the end of the booking process,
when you've got taxes and all the other things.
Consumer advocates refer to this as drip pricing,
where you start the hotel,
start with a come-on price to bring you in
and slowly drip in added fees to add up to the price
that the room actually is.
Many consumer advocates have also called resort fees
the equivalent of charging a second room rate.
So you have the first room rate, $20 a night,
and you've got the second room rate, $25 a night.
That's the resort fee,
'cause they're essentially both room rates
'cause you can't opt out of it.
This kind of drip pricing is actually illegal
in many countries, including Australia
and every country in the European Union.
But in the USA, there are no laws for or against it.
So speaking of the USA,
where did resort fees originate from, hmm?
Well, they originated in North America in 1997.
That's where most people point to it,
where many resorts in North America
started charging mandatory fees for amenities
regardless of whether the guests use them or not.
And it seems like everyday
there's more and more hotels charging resort fees.
Now, hotels in New York city and Los Angeles,
places that typically aren't considered resorts,
are charging these mandatory fees.
That's why they call it something else,
like a destination fee, an amenity fee, a city fee.
And to give you an example of how this is increasing,
in 2016, in New York city there were 15 hotels
that charge resort fees.
And in 2018, there were 80 plus hotels
in New York city that charge resort fees,
so that number is growing exorbitantly.
And it's not just fancier nice hotels
that are charging resort fees,
all the hotels are getting in the act,
including the Days Inn in Miami beach
and even the Super 8 Motel in Las Vegas, Nevada.
Speaking of creative ways of disguising the resort fee,
the Life Hotel in New York city describes their resort fee
as the NYC mandatory city destination fee.
It is not something that's mandatory from the city.
It's not imposed by the city.
It is a fee entirely from the hotel and not a tax.
I'm pretty sure all consumers,
including myself, hate resort fees,
so why do the hotels do it?
Well, I think there are three reasons.
Number one, so that they can get more revenue
without increasing the room rate itself.
And why is this important?
Because the room rate gets ranked on search engines.
It gets displayed a lot of different places.
If a hotel increases the room rate,
then it might not get displayed
as highly in search results in a lot of different places.
So instead, they increase this resort fee.
They keep increasing this resort fee
and they hold the room rate constant
or they decrease the room rate and increase the resort fee.
The second reason is so they don't have to pay
as much commission to travel agents or online booking sites.
Why is this important?
Well, because the commission typically generated from hotels
is typically on the room rate itself
and not on any other fees or taxes.
Now, some online booking sites, like booking.com,
have gotten wise to this
and they've actually started charging commission
on the entire price,
which includes fees and not just room rates.
And the third reason has to do with taxes
and tax structures.
Often, the room rate can be taxed
at what's called the transient occupancy tax,
which is something that typically applies to hotels
and fees are often taxed at a sales tax rate,
which is typically lower
than the transient occupancy tax rate.
And so, it's a way of decreasing the overall tax perspective
and so, they think a way of potentially making
the overall room slightly cheaper
because less taxes are being paid on the total price.
So that's what I think, but what do the hotels say?
There was an article in Fortune Magazine a few years back
where they asked a few different hotels
why they charge resort fees
and it was interesting to see some of these responses.
The Arizona Grand Resort and Spa in Phoenix says,
"Studies have proven that travelers prefer
"to book a lower room rate and pay the resort fee on top
"rather than to pay one bundled higher price."
That's what the hotel says.
Is that what you think?
Another hotel in Florida,
The WaterColor Inn Resort and Spa, says,
"By not including the resort fee, we're able to break out
"all the amenities the guests will receive with this fee,
"an explanation that may be missed
"if this fee was included with the total rate."
So apparently, they charge resort fee
just so they can explain some of the amenities that you get.
Do you appreciate that?
But you know what, all this resort fee frenzy
it's backfiring on the hotels and the resorts.
There was a recent article published
in the Los Angeles Times showing that stays in Las Vegas,
visitation to Las Vegas has actually decreased
as all these additional fees have been added by the hotels,
that travelers really don't like to be nickel and dimed.
They don't like the resort fees.
They don't like the parking fees.
And so, actually hotels are seeing less revenue
because of these resort fees.
And some hotel rating systems, including Triple A,
are actually deducting points off their ratings
for hotels that charge resort fees.
Now, why would Triple A be reducing their ratings?
Because Triple A says, consumers don't like resort fees.
(gasps) What a surprise!
It's something in the future
and I've already said in pretty much every hotel
that I talk about a resort fee,
but I'm gonna consider docking a half-topher for hotels
that charge resort fees.
Okay, so how do you avoid resort fees?
Well, I mentioned it's mandatory,
so it's not really easy to avoid,
but I'd say there's five ways to avoid paying resort fees.
The first one is to have some elite status
with the hotel chain that you're staying at.
For example, if you're going to Las Vegas
and you have Caesars Diamond Status,
well, then at hotels that are owned by Caesars,
they'll wave the resort fee
because you have that high level status.
The second way to avoid paying resort fees
is to book your hotel with award points.
Some hotel chains and some hotels,
if you book your stay entirely with award points,
then they may not charge you with the resort fee.
Now, this isn't a universal truth.
Some chains will still charge you the resort fee
even if you have points.
And then, sometimes may be, if you book with points
and you have elite status, then they wave the resort fee.
The third way to avoid the resort fee,
and some people on the online forums
report success with this,
is simply asking for it to be removed,
asking the front desk staff.
If they don't remove it, ask for the hotel manager.
This isn't one that I've employed simply because
I don't really like to argue with front desk staff,
but if that's your style,
this may be a way to get it removed.
This often works well on hotels
that have just started to charge the resort fee.
They often have some kind of soft roll out of it,
say where the first year, if somebody disputes it,
they'll just take it off the bill, but then at some point,
hotels typically hold a pretty hard line
and be like, "Nope, you can't get away from this fee".
The forth way to avoid paying the resort fee
is to dispute it with your credit card company.
If you found that the resort fee was not advertised
and you can prove it to the credit card company,
the credit card companies have been
taking those off the bill.
And that's actually something where this might be good
because if it's kind of a shady hotel
and they get enough credit card disputes,
that could increase the fees they have to be
or perhaps, even revoke their merchant account
because they're not playing fair with customers.
And the fifth way to avoid paying resort fees
is to, frankly, just stay at a hotel that doesn't have them.
That's my preference.
On my Las Vegas videos,
I often tell people the way to avoid paying resort fees
is just not stay on the Las Vegas strip.
Find a Marriot, find a Springhill Suites,
find a Hilton, find a hotel that doesn't charge resort fee.
You don't like paying the resort fee?
Find one that doesn't charge it.
Use your money to influence the behavior
you like from the hotels.
If people keep paying them and they're just fine with it,
the hotels are going to keep charging them.
Well, if you're going to Las Vegas,
you might enjoy watching my series on Las Vegas.
Or if you're looking to book a hotel,
you might enjoy my video
about how to get really good deals on hotels.
You'll also find links in the description below.
I won't say goodbye
because I'll see you in one of these videos.