Las Vegas Hotels Discover Fraudulent Resort Fees are Hurting Their Business

“Resort fees” are extra charges, on top of a room rate, that aren’t optional. In other words they’re part of the price of a room, but the hotel advertises a lower price instead. That’s on face deceptive.

I understand the logic of charging a resort fee in a market where everyone else is doing it. If a hotel charges a $250 room rate and a $30 resort fee, that’s $280 a night. If another hotel charges $270 a night they’re actually $10 cheaper — but appear at first glance to the consumer to be more expensive. Once resort fees are standard in a market, a hotel loses by not charging them.

What’s become especially egregious in recent years is the spread of resort fees to new markets, under different marketing. City hotels aren’t resorts and instead they promote “destination fees.”

Resort Fees are Ok With the FTC

Guidance from the Federal Trade Commission, though, is that resort fees are fine if they aren’t deceptive which means “a hotel prominently discloses the resort fee upfront and includes it in the total price.”

Generally speaking resort fees make it difficult to know at the start of search how much a hotel will cost, and make it difficult to compare prices, but consumers are aware of such fees before they stay.

How Loyalty Programs Handle Resort Fees

Hilton and Hyatt don’t charge guests resort fees when redeeming points. Hyatt waives resort fees for top tier elites on paid stays. Marriott makes guests using their points pay resort fees.

Marriott’s terms though do say that if a hotel includes internet access in their resort fee then they must offer program members a different benefit.

Participating Properties that have mandatory resort charges, which include internet access, will provide a replacement benefit, to be determined at each Participating Property’s discretion.

Hilton Honors though says that if a resort charge includes an elite benefit, then it’s not an elite benefit at that hotel,

These Amenities are offered solely at the discretion of Hilton HHonors Worldwide, L.L.C., and the individual hotel. Not all Amenities are provided by all hotels within the Hilton Worldwide portfolio. When payment of a resort charge is required, check individual hotel for availability of included Amenities.

Resort Fees: Guests are ‘Leaving Las Vegas’

A year ago it appeared that resort fees were hurting Las Vegas. Resort fees are a price add-on, and higher room rates depress demand.

Las Vegas hotels generally reduce room rates as low as they have to in order to fill rooms, figuring they’ll make money on a guest’s other spending while in town. They want the gambling, shows, drinking, retail and other activities. However resort fees are effectively a floor for how low they can drop prices. When hotels are empty that’s a problem.

Now with Las Vegas guest levels especially low we’re starting to see cracks in Vegas resort fees.

Some hotels have eliminated recently-added parking charges. When demand drops hotels try to fill rooms, they can do that via lower room rates or by reducing total trip cost.

Meanwhile other hotels have eliminated resort fees on a promotional basis,

SLS Las Vegas, Golden Nugget and Red Rock Resort have launched temporary marketing campaigns in recent months offering rooms without resort fees, taking advantage of the interest the topic receives on social media.

MGM says they aren’t raising fees, not at all surprising if occupancy is down. Meanwhile the CEO of Caesars says he understands that raising prices in a deceptive way can depress demand,

“We are certainly sensitive to the fact that we can hurt our own profitability and revenue growth if we get exorbitant or do things that have no value to them.”

Guests don’t like opaque pricing, and higher pricing hurts hotels in a challenging market. If demand were up in Las Vegas we wouldn’t see hoteliers tinkering with these fees. Still, it remains hard to walk away from them without everyone doing it at the same time.

What Needs to Happen

There are really two equilibria here: no one charges resort fees (although there’s an incentive for a given hotel to defect if resort fees are permissible as it makes their rates look cheaper than the competition) or everyone charges them.

If even one hotel charges them, we’d expect a shift towards everyone charging them. Destination charges were relatively new in New York a year and a half ago but have since become more common. So what’s stopping a hotel from instituting a resort (or destination) fee, leading others to follow?

To the extent resort fees aren’t illegal we need significant shaming of hotels to change their incentive. Hotels need to respect their guests, and that starts with honesty about the most basic element of a reservation, the rate.

The real solution though it seems to me comes from online travel booking sites. They need to deliver value to their customers by helping to compare options with all-in pricing. We’ve seen this in many ways from Google, it’s shocking that neither Expedia (and affiliated sites) nor Booking (and affiliated sites) have made meaningful moves in this direction.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Actually the real solution IMO is every single person that stays at one of these hotels needs to go on Tripadvisor, yelp etc and leave a 1-star review with 3 words: “Scam resort fee”. That is the only way to really get their attention.

  2. This is why I book online so this way, I know ahead of time how much $ gUaP $ I’m paying for everything. I hate surprise fees!

  3. A major reason for resort fees are corporate room rate limits that only apply to the base rate. Increase base rate and you price out certain major corp customers, whereas using fees means you can attract those customers and still increase revenue. I don’t see a way out other than legislating or major public backlash – which likely won’t happen.

  4. I will absolutely not stay at a property with resort fees. Las Vegas has ruined any chance of visitors who don’t want any extra nonsensical costs for their trips with these BS fees. With more casinos around the country you would think Vegas would do more to entice visitors and not have bogus fees that are deterrents.

    I literally chose to book an award stay in Kona v Maui earlier this year because the property in Kona had no resort fee while Maui did.

  5. @LAXJeff- I applaud your dedication! I have stayed at places with resort fees in the past, but am getting less tolerant of the practice. It used to be that I could avoid the fee because I’m not really a resort person. I love a big, fancy hotel like the rest of you, but am not a spa/swimmng pool/cabana/golf kind of person. I like to get out and explore. So in the past I could book a room at a non-resort hotel and avoid the fee, or book the resort on on points and avoid the fee. Now I’m seeing destination fees in both small cities and resort heavy locations. When the Hyatt Place charges a destination fee, we’ve got a big problem. I’m looking at you, Hyatt Place Waikiki!! I actually booked a week at a luxury B&B in New Mexico to avoid the very hefty resort fees in the Hyatt Tamaya. I’m a few miles away, have a gourmet breakfast and saved $1k.

  6. The real solution is for the government to level the playing field for consumers by making it illegal for any and all HOTEL (or non-governmental party) fees to be mandatory fees for guests beyond the fee for the room rate itself. (The relevant taxes charged by a governmental authority for the room/room sales would of course still be mandatory and legal).

    A more free market for services comes about when there is a more level playing field when it comes to suppliers marketing to consumers, and the way to do that with regard to hotels is to do as I suggest above.

    While some so-called free market ideologues may not have the courage or open-mindedness to consider that free markets are most competitive in a level information marketplace, and such a level may only be achievable by mandatory government standards, I am willing to consider it.

    Anyone notice that mandatory hotel/resort fees don’t apply in the EU? And it hasn’t killed the EU hotel/resort industry to not have these deceptive hotel prices. I have to wonder how US suppliers marketing themselves in the EU play the hotel/resort fee game.

  7. Totally agree. Have typically gone to Vegas 5-6 times a year; now only once. Why? Bogus resort, parking, minibar, and even sometime pool fees. Add onto that inflated meal prices and higher taxes (to subsidize building the new Raiders stadium)… I have actually found Reno a far better getaway in almost every category. Feels more like “old Vegas” before the corporate greed took over.

  8. Apparently using an EU/EEA version of Expedia is a way out of being hit by these deceptive, mandatory hotel resort/destination fees. The EU/EEA have protections for consumers even when staying at hotels that aren’t in the EU/EEA.

    I guess I’ll be using more European websites/versions of websites to book US hotels and avoid the hotel scam fees.

    Australia also has prohibitions against these hotel scam fees.

  9. @GUWonder the US government has declined to regulate, so the most likely and practical solution is for booking sites to present the information in ways that help consumers make better decisions.

  10. That the FTC has failed to have any real interest to do much of anything in this kind of matter (and many other travel related matters) doesn’t mean that there can’t be federal or state legislation to prohibit such practices by hotels; nor does it mean that other governmental authorities can’t get involved to crackdown against this anti-consumer, anti-competition-maximizing hotel practice.

    While I would welcome more online booking sites making it easier to compare total price at time of initial search by consumers, relying upon the online booking sites in the US to do so is not the strong recipe for consumers sick of deceptive hotel pricing practices. If anything your idea of a “solution” would entrench the practice of mandatory hotel fees beyond the room rate and would still result in lots of consumers being misled and otherwise disadvantaged by hotels playing this pricing game.

  11. Given Trump’s ownership and other interest in hotels, are you expecting he would veto or otherwise try to block a ban against mandatory hotel fees?

    Which Trump properties — owned, managed, franchises or otherwise affiliated with the Trump brands — have mandatory hotel fees?

  12. It goes beyond being customer-unfriendly. Commissions to travel agents and other intermediaries are paid based on the base rate, so by depressing the base rat and inflating the resort/destination/facility fees, hotels can pay less commissions overall.

    There are also cases where thse fees help hotels to cheat various municipalities out of tax revenue as is detailed in this blog post:

    http://killresortfees.com/blog/2019/2/23/the-new-twa-hotel-will-use-hidden-fees-to-cheat-11025920-of-taxes-annually

    As far as the solution resting with the OTAs, part of the problem is that these OTA don’t even let you compare the all-in price after taxes, much less the resort fees. See this Priceline example:

    https://bit.ly/2UxY7yK

    Not one of the rates shown on the first page matches the total all-in price for the hotel. Both taxes/”normal” fees + resort-type fees are both added-on on the final confirmation page. They need to start with being transparent with the price actually paid to them and then work on resort fees imho.

  13. A couple of things here.

    I stopped going to Vegas back around 2011. I got tired of arguing with cab drivers and people in Vegas trying to scam me out of my money. Even then a few hotels had resort fees but the only way to see them was to book a reservation and during the payment process you had to click on terms and conditions and open a PDF document to read the fees, hopefully they aren’t that well hidden now.

    I’ve visited Scottsdale frequently since I previously resided there and have a rental property (my previous residence) there. I was staying at a few Hiltons out there because they did not charge a resort fee but this year that is no longer true. Fortunately it appears I’ll be relocating back there and won’t need to deal with the fees.

    Right now it seems like the country produces very little but has become obsessed with charging for almost everything. You definitely see it with airlines and now hotels. Rental cars can get tricky at times with fuel charges and some other fees.

    Disney is going crazy with sky high entrance fees and parking lot fees (which keep going up).

    It just seems like companies are getting extremely greedy and can’t provide any useful function so instead they are trying to squeeze out extra money via some questionable methods.

    Its like some web sites or other places that want me to pay for the use of them (fine) but instead of paying a one time fee they also feel a need to auto-renew it for “my” convenience. No, it is used to screw people who forget about it. Instead of getting any money from me, I avoid this type of charge as well.

    Maybe I’m getting old and grumpy but I can be very generous with tips and don’t mind paying for a quality product but once you start hitting me with a bunch of fees I either go elsewhere or do without it.

    Maybe some of the businesses that deal with these places need to stop paying refunding travelers for those fees and when the hotels lose business they will change it.

  14. Government needs to step up and regulate, whether it’s federal, state, or local. They collect on tourism, so if tourists stop coming, it’s in their economic interest and authority to regulate it

  15. Another idea: when you consider booking a property and then decide against it due to the resort fee, send the general manager a polite email letting them know. Likewise, let the local convention authority or chamber of commerce know you’re avoiding their city altogether due to the fees. Finally, consider tweeting your decision with a mention of the specific property or city.

  16. DB – Good point about giving a bad review, which is a totally valid point. It’s very hard to avoid resort fees in places like Waikiki & L.V., but I generally don’t book hotels with resort fees unless I really have no other convenient choice. I used to do the same thing years ago with hotels that charged for WiFi.

  17. The “resort” fees and other scam fees are infuriating. I will never stay at a place that has them, and my conversation or booking process ends cold when I see that. They should be illegal, full stop. The next best thing is that search sites need to give the correct price, not the partial price until the scam ends.

  18. I hate resort fees. But I am not fooled by them. I add them to the price of the room before buying. If the cost is too high, I do not go. I have had some really good deals in Las Vegas, even considering the resort fee. One time I stayed in Treasure Island for about $50 all in (including resort fees), I had a room with a view of the strip, and they gave me free buffets. I ate so much at the buffets, I could barely move. It was a good deal but I had to go on a diet when I returned to New York. I did not even used the free chips. Where did I get the deal? At hotels.com.

    No, I do not want to create a Department of Hotel Pricing (DHP) in Washington DC to police hotel fees nationally. Can you imagine? The DHP would start out a single person. Within 10 years, The DHP would have large staff of people paid over $100K average and a budget in the billions of dollars. Its mandate will have grown to cover all BNBs, Air Bnb, and who knows what else. Most likely it would have a massive database of all charges by any person that rents short time. Soon that department would be sacrosanct. The computer for this database alone would probably cost millions of dollars. Any cuts to department would cause the press to waste time with exposés, the Congress to make committee hearings, and supporters to warning of serious damage to the USA due to cuts to the DHP. The DHP might even have its own swat team. If you charged any unapproved fee, the DHP Swat team would show up at your door, in full body armor and machine guns, and take you away in handcuffs. Gotta set an example.

    Finally, anyone that wants to investigate Trump for resort fees, I have my song. Dumb de DUMB DUMB. However, I am sure the geniuses at CNN are on it.

  19. The premise of your post is wrong. Look, nobody hates resort fees more than me, but there really is no evidence that they’re hurting Vegas tourism. A couple of guys have SPECULATED that they’re bad for business. If I had a dollar for every pro-consumer speculation in the travel industry that was wrong, I could own my own Vegas casino. The reality is that I don’t know whether resort fees are bad for Vegas casino owners and neither do you. My bet (ahem) is that they’re making more money by charging these fees whether we like them or not. Sadly, hidden pricing usually works to boost revenue.

  20. I grit my teeth in rage when i hear the adjective “mandatory“ precede resort fees. They are, in fact, discretionary. As Gary notes, some chains waive them for elites, and in Vegas your casino host may waive your fees if she deems your spend sufficient. Vegas properties will waive them as partial compensation for “service fails” and customer complaints.

    It’s doubly insulting, too, that these fees are *taxed*!

    Searching “Vegas resort fees list 2019” will yield many sources. $39 is *outrageous* anywhere!

    I’m all for the shaming campaign. And voting with our wallets. Ought to yield quicker results.

  21. A note to @A71, LV is a GREAT restaurant town, and high prices are not endemic once you leave the Strip. Try these three to start your culinary tour: Tacos and Beer, Le Thai, and Ping Pang Pong, in the Gold Coast casino.

  22. And you thought the mob was ripping you off. In Vegas SLS has no resort fee. As soon as they start charging one I will be done with them also. Used to go to Vegas 4 times a year now im lucky to go once. i found with my gambling savings, there are lots of places to travel without resort fees.

  23. Airlines used to do the same. A DOT rule adopted in 2011 changed all that. Total fees must now be advertised up front. Adopt the same rule for hotel and car rental agencies and problem solved. (Some airlines, of course, charge various add-on fees for luggage, better seats, etc., but at least the basic cost of the ticket is clear, and comparisons are much easier than before.)

  24. we stayed at a IHG hotel in san fran in the homeless district and they charged $29 resort fee????????????? seriously when u had to walk thru the homeless and the garbage they left behind what a joke and $62 to park> nuts the hotel staff said not to walk around the area dangerous!! it is near union swuare.. not going back

  25. That’s right take out the coffee pots and charge resort fees. I have been getting free rooms at Boulder Station and I asked why I couldn’t get Wi-Fi, oh $10 a day. Went without. Last time, they proved I didn’t ask for a smoking room. LOL and get this , my Tub flooded bath below. So last time my Tub wouldn’t close, so no more baths I guess. Me and my 2 nieces mostly ate and gambled there. Had to go to Blueberry Hill. I guess my free rooms are over since the pool will open. I will not pay these rediculus prices for bad Customer Service. Getting a drink is impossible unless you play at a Bar. They are getting ruder every year. They need to bring back old Vegas and stop being so greedy.

  26. We just don’t go to Vegas anymore. I won’t go unless they drop resort fee,s. Lots of casinos around with better odds.

  27. I despise resort fees, and it absolutely has cost Las Vegas business as far as I am concerned. I think resort fees should be illegal. There’s absolutely no reason why they shouldn’t be illegal. They are a money grab.

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