More regulations? No thanks. Use the free market to not use those hotels. If consumers stop going, they will fix their prices.
Some places calculate it on gym or pool charges (whether or not the guest uses the facilities), forced gratuities, towel-cleaning expenses, or other items most people assume are included in the advertised rate. Other hotels don’t explain the basis for the charge at all.
Resort fees in Las Vegas keep going up and up, and Las Vegas Sands is the latest operator to jump on the raised surcharge bandwagon. At a $6 hike, from $39 to $45 a day at the company’s two chichi properties the Venetian and the Palazzo on the Strip, are operators just resorting to what seems like highway robbery of tourists these days?
On March 1, certain MGM Resorts and Station Casinos properties implemented higher resort fees, and last month, Caesars Entertainment announced fee hikes, which the company claims is to cover common amenities such as internet, local phone calls, and business and fitness center use.
When you consider that using a fitness center used to incur a per-diem charge, and that only a small fraction of guests actually set foot in one, you realize that the “resort fee” system is an ingenious way for hotels to simply make more money, without incurring any more costs.
At $45, the Venetian and Palazzo resort fee now has the dubious honor of being the highest on the Strip. However, the two properties have not followed the recent Las Vegas trend of charging for parking. Yet.
$39 seems to be the average resort fee for marquee properties. That’s the rate these days at both the Wynn and the Encore, Caesars Palace, the Bellagio, and MGM City Center nongaming resorts the Mandarin Oriental and Vdara.
Money for Nothing
Resort fees are about as popular as taxes, and in Las Vegas, guests are often stunned to see them added to their bills, particularly as the “amenities” included are basically cost-free to the casino.
The $45 at the Las Vegas Sands properties provides in-room Wi-Fi, boarding pass printing, unlimited local and toll-free calls, and access “to thousands of top newspapers and magazines” while using an app on the resort’s internet.
If you consider that probably 99 percent of guests have no need for a resort app when all the same information is on their own computers and mobile phones, and the other “costs” mentioned range from negligible to nonextistent for hotel operators, you can see who the winners are in the resort fee wars.
For a one-night stay in early April, The Venetian and Palazzo both quoted us the same room charge of $149.00. With taxes, that comes to $168.94. But the fine print under “total” reads, “Does not include resort fee of $45/night.” Meaning the true cost of that overnight stay is actually nearly 27 percent higher than quoted, at $213.94.
And Las Vegas regulars may be miffed to learn that resort fees don’t count towards most loyalty rewards programs. The only potentially excluded guests are, in fact, those who can afford it the most easily: rewards program members in the highest tiers. These high rollers typically see their resort fees waived, in a parallel move to parking fee structures these days.
During slow periods in Las Vegas, resort fees at lower-tier properties can be as much as the advertised room rate. For April 3-4 at the Tropicana, a room can be booked for $39. But the resort fee is $35, ballooning that seemingly good deal, with tax, to $83.90.
“In 2017, the Federal Trade Commission (FTC) issued an advisory on resort fees that concluded, “Separating mandatory resort fees from posted room rates without first disclosing the total price is likely to harm consumers.”
But advisories carry no legal weight, and the FTC adviso clearly has had no impact on the industry. All but four US states have the fees under legal scrutiny now, but Nevada has remained out of that fray.
Bad Timing
Free parking was a Las Vegas amenity afforded to guests for decades, but that began vanishing when MGM Resorts debuted rates for many of its garages in 2016. Paired with climbing resort fees, it now means that Strip casinos aren’t doing much to lure in bread-and-butter gamblers these days.
The parking and resort fee increases come just as the Las Vegas Strip is in the midst of financial drops that have followed the October 1 shooting that left 58 dead outside of Mandalay Bay. Compared to the same months in 2016, visitor volume was down 4.2 percent in October, 3.7 percent in November, and 2.5 percent in December. Even January began 2018 with a 3.3 percent loss.
Some federal lawmakers want to send hotel resort fees packing.
Democratic Congresswoman Eddie Bernice Johnson of Texas and Republican Congressman Jeff Fortenberry of Nebraska recently introduced a bipartisan bill that would try to abolish resort fees as add-ons, and force hotels to include the full pretax cost of the room in their advertised rates.
“A record number of travelers were subjected to hidden fees charged by hotels, motels, and other places of accommodation,” Rep. Johnson said, citing people’s experiences this past summer, while introducing the bill. “Consumers deserve full transparency when making their travel plans. They should be able to enjoy their vacations without being ripped off and financially burdened with almost twice as much as the room that had been advertised,” she added.
Some economists and consumer advocates note that resort fees allow the hotels to grab your attention by offering deceptively low or “teaser” nightly rates. Secondly, they make it harder and more time consuming to shop around for deals: You may have to click through several web pages to find the true cost of each room. Thirdly, the inattentive traveler often misses them.
Resort fees are typically not optional. Mandatory hotel fees increased 11% over the 12 months to July 2018 and the number of hotels including such fees increased by 14% over the same period, according to data from ResortFeeChecker.com, a website that tracks these fees.
The industry’s trade group defended the fees. “When resort fees are applied, they are clearly and prominently displayed by hotel websites prior to the end of the booking process, in accordance with guidance issued by the U.S. Federal Trade Commission,” Brian Crawford, the association’s executive vice president of government affairs, commented in a printed statement.
“Hotels strive to create memorable experiences for all guests,” he said. “All online lodging advertisers, including third-party online travel agencies and short-term rental platforms, should be held to the same standards of transparency,” he added.
The American Gaming Association, which represents casinos, said the industry adheres to federal guidelines. “The Federal Trade Commission closely examined pricing disclosure practices in 2012 and issued thoughtful guidance that has benefited travelers, brought additional transparency to the marketplace, and has the full backing of the casino-resort industry,” said Chris Cylke, the senior vice president of government relations, in another written statement.
Members, he added, offer “prominent, clear, and repeated disclosure of resort fees throughout the booking process with all fees included in the total price.”
Don’t miss: Marriott facing lawsuit over ‘deceptive’ resort fees that allegedly harm consumers
Consumer advocates say resort fees are still unclear to many travelers. If, for example, a hotel room is advertised on a website for “$299 a night,” but there is a mandatory $50 “resort fee” in addition, they say the advertised rate should be $349.
A Saturday night at the famous Bellagio Hotel in Las Vegas next month will cost $429, the hotel’s website says. That does not include a $51.02 resort fee, which would bring the actual cost to $536 a night. (MGM Resorts MGM, -3.45% , which owns the hotel, declined to comment.)
The InterContinential New York Barclay in Manhattan charges a $34.43 resort fee on top of its nightly rate, which recently was $288. (IHG Hotels did not immediately respond to requests for comment.)
The hotel industry employs 221 lobbyists in Washington, according to the independent Center for Responsive Politics. In 2016, the last presidential election year, campaign donations from the hotel and casino industries ($26 million and $38 million, respectively) were about as much as the donations from defense contractors ($31 million). The lobbyists employed (221 and 299) compare with 625 lobbyists employed by defense contractors, and 205 employed by the airlines.
Last year, travel writer Christopher Elliott cited a report by ResortFeeChecker.com noting that resort fees appear to be more popular in some states.
“Florida is the unofficial home of the hotel resort fee, with the Sunshine State having the top two cities and four in the top 10. Las Vegas, Honolulu, and New York also have high resort fees,” he wrote. “The most dramatic growth of resort fees took place in the Big Apple, where the number of hotels doubled from last year.
“That kind of consumer deception, referred to as ’drip’ pricing, was nearly outlawed by the Federal Trade Commission a few years ago,” Elliott wrote. “Instead, the government backed down after the presidential election. Meanwhile, the Australian government took the lead in consumer-friendly pricing regulations, requiring that the price you’re quoted is the price you pay.”
What the heck is a resort fee, and is there any way to avoid paying it? I often get this question on my Las Vegas videos and wanted to make a video to explain what the heck this fee is. This fee comes in many different names, Resort fee, Destination fee, Urban Fee, Facility fee, Amenity Fee, Resort Charge, but it’s virtually the same thing.
It is a fee that is added by the hotel on top of the room rate and taxes. IT IS NOT A TAX.
Range from $20-$50, but can be up to $100/night. They can sometimes be more than the room cost, particularly in Las Vegas, where resort fees apply to all 62,000 hotel rooms on the Las Vegas Strip.
The hotels say these fees are typically to cover a bunch of things that used to be included for all guests… but somehow are now covered by this fee, like pool access, pool towels, your in room coffee pot, coffee to use in the pot, a bottle of water so you can make the coffee, wifi, gym access, massages, movie rentals, etc, etc.
These fees are particularly irritating because they are often not advertised clearly. During booking you typically see the room rate first, then later see it with the resort fee tacked on.
Consumer rights advocates call it drip pricing, one price is lured out to bring you in, then more fees are tacked on at the end. And it’s actually illegal in many countries including Australia, and countries in the EU. But the USA doesn’t have any laws against it.
It’s generally believed these fees originated in North America around 1997 when some resorts started adding mandatory fees regardless of which facilities were actually used by the guest.
It seems like every day there’s another hotel charging a resort fee… and now tons of places that aren’t even resorts… lots of hotels in New York, LA, that’s why they call it something else, like a “destination fee.” There were 15 hotels in New York City with resort fees in 2016. In 2018 there are 84. Even The Days Inn in Miami Beach, and the Super 8 in Las Vegas charge resort fees.
The Life Hotel in New York City lists their fee as an "NYC mandatory City Hotel Fee." A resort fee is not a tax nor is it a mandatory city hotel fee.
I’m pretty sure all consumers hate these fees, including myself. So why do hotels do it?
1. So the hotel can get more revenue without increasing the room rate that gets ranked on search engines
2. So that they don’t have to pay as much commission to travel agents since travel agent commission is based on the room rate.
3. So that guests pay less taxes because the hotel occupancy tax often applies on the room rate
So that’s what I think.. But what do the hotels themselves why? An article in Fortune magazine quotes a few hotels on why they have resort fees:
The Arizona Grand Resort & Spa in Phoenix says “Studies have proven that travelers prefer to book a lower room rate and pay the resort fee on top than to pay one bundled higher price”
The WaterColor Inn & Resort in Florida says: “By not including the resort fee, we’re able to break out all of the amenities the guest will receive with this fee – an explanation that may be missed if this fee was included within the total rate”
So why don’t search engines display the resort fee more prominently? If they do then their prices will seem higher than everybody elses.
But you know what? It’s backfiring… a recent article in Los Angeles Times suggests that Las Vegas’ recent decline in visitation has been due to resort fees and parking fees.
Some hotel rating systems, including AAA, have taken a policy of deducting points from a hotel being reviewed if they charge resort fees. AAA has said resort fees are a major annoyance of travelers
LAS VEGAS – The pandemic may have forced a shutdown of the Strip – but it's also resurrected a relic of old Las Vegas: free parking.
MGM Resorts, operator of a dozen properties in this gambling and entertainment capital, announced Monday the return of the treasured amenity, reports the Reno Gazette Journal, which is a part of the USA TODAY Network.
“MGM Resorts is updating many of our offerings as we prepare to welcome guests back, and that includes implementing free parking," the company said in a statement.
A start date has not been disclosed. In the wake of COVID-19, MGM won't open all hotels at once, but rather start with two or three targeted at different traveler budgets.
The first two resorts that will reopen with free parking when shutdown orders are lifted? New York-New York Hotel & Casino, a midprice hotel on the south end of the Strip with a roller coaster, arcade and Irish pub, and Bellagio, the luxury mid-Strip resort that's home to the famous fountain show, high-end shops and restaurants, a conservatory and a museum.
Parking strategy swing
In 2016, a majority of casino companies started charging tourists to keep their cars in the parking garages of Strip properties, a move that raised concerns that free parking would soon fade away.
In 2019, after experimenting with a paid parking model, Wynn Resorts broke ranks with the bulk of hotel-casinos on the Strip and announced free self-parking would resume at its Wynn and Encore resorts.
MGM Resorts will soon join a small group of resort neighbors — Treasure Island, SLS Las Vegas, Wynn, Encore, Venetian and Palazzo — that offer free self-parking.
In an email, Caesars Entertainment declined to comment on whether the company would join the unfolding free parking trend.
Paid parking woes
Paid parking has been a center of frustration of tourists remembering the old days.
“The parking fees are a gigantic deal for everybody. They gripe all the time about things they don't like. They hate resort fees. They hate paid parking worse," Anthony Curtis, founder of LasVegasAdvisor.com, told the USA TODAY Network.
One solution to paid parking woes has been avoiding casino-resorts that charge for parking, according to a 2018 Las Vegas Global Economic Alliance survey.
Data revealed almost 37 percent of respondents avoid parking at Strip casinos that charge for parking. About 7 percent said they visit the same hotel-casinos regardless of parking fee policies.
H. R. 4489
To prohibit unfair and deceptive advertising of rates for hotel rooms and other places of short-term lodging.
IN THE HOUSE OF REPRESENTATIVES
September 25, 2019
Ms. Johnson of Texas (for herself, Mr. Fortenberry, and Ms. Bass) introduced the following bill; which was referred to the Committee on Energy and Commerce
A BILL
To prohibit unfair and deceptive advertising of rates for hotel rooms and other places of short-term lodging.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the “Hotel Advertising Transparency Act of 2019”.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) As of the day before the date of the enactment of this Act, hotel rooms and other places of lodging are often advertised at a rate and later in the buying process mandatory fees are disclosed that were not included in the advertised room rate.
(2) The mandatory fees described in paragraph (1) are sometimes called by names such as “resort fees”, “cleaning fees”, or “facility fees” and they are all mandatory and charged by a place of short-term lodging in addition to advertised room rates.
(3) The number of short-term lodging facilities that charged mandatory resort fees is growing.
(4) Advertising that does not reflect the true mandatory cost of a stay at a place of short-term lodging is deceptive.
(5) The Federal Trade Commission has authority under section 5 of the Federal Trade Commission Act (15 U.S.C. 45) to regulate and prohibit unfair or deceptive acts or practices in or affecting commerce.
(6) In 2012 and 2013, the Federal Trade Commission exercised its authority under that section 5 to issue warning letters to 35 hotel operators and 11 online travel agents. In those letters, the Commission cautioned hotel operators and online travel agents that mandatory resort fees could confuse consumers in violation of section 5(a)(2) of such Act (15 U.S.C. 45(a)(2)).
(7) In 2017, an economist at the Federal Trade Commission published an issue paper that found that forcing consumers to click through additional webpages to see a hotel’s resort fee increases the time spent searching and learning the hotel’s price, and went on to state the following: “Separating the room rate from the resort fee increases the cognitive costs of remembering the hotel’s price. When it becomes more costly to search and evaluate an additional hotel, a consumer’s choice is either to incur higher total search and cognitive costs or to make an incomplete, less informed decision that may result in a more costly room, or both.”
SEC. 3. PROHIBITION ON UNFAIR AND DECEPTIVE ADVERTISING OF HOTEL ROOM RATES.
(a) Prohibition.—No person with respect to whom the Federal Trade Commission is empowered under section 5(a)(2) of the Federal Trade Commission Act (15 U.S.C. 45(a)(2)) may advertise in interstate commerce a rate for a place of short-term lodging that does not include all required fees, excluding taxes and fees imposed by a government.
(b) Enforcement By Federal Trade Commission.—
(1) UNFAIR OR DECEPTIVE ACTS OR PRACTICES.—A violation of subsection (a) by a person subject to such subsection shall be treated as a violation of a rule defining an unfair or deceptive act or practice prescribed under section 18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)).
(2) POWERS OF COMMISSION.—
(A) IN GENERAL.—The Federal Trade Commission shall enforce this section in the same manner, by the same means, and with the same jurisdiction, powers, and duties as though all applicable terms and provisions of the Federal Trade Commission Act (15 U.S.C. 41 et seq.) were incorporated into and made a part of this Act. Any person who violates this section shall be subject to the penalties and entitled to the privileges and immunities provided in the Federal Trade Commission Act (15 U.S.C. 41 et seq.).
(B) RULEMAKING.—
(i) IN GENERAL.—The Commission may promulgate such rules as the Commission considers appropriate to enforce this section.
(ii) PROCEDURES.—The Commission shall carry out any rulemaking under clause (i) in accordance with section 553 of title 5, United States Code.
(c) Enforcement By States.—
(1) IN GENERAL.—In any case in which the attorney general of a State has reason to believe that an interest of the residents of the State has been or is threatened or adversely affected by the engagement of any person subject to subsection (a) in a practice that violates such subsection, the attorney general of the State may, as parens patriae, bring a civil action on behalf of the residents of the State in an appropriate district court of the United States to obtain appropriate relief.
(2) RIGHTS OF FEDERAL TRADE COMMISSION.—
(A) NOTICE TO FEDERAL TRADE COMMISSION.—
(i) IN GENERAL.—Except as provided in clause (iii), the attorney general of a State shall notify the Commission in writing that the attorney general intends to bring a civil action under paragraph (1) before initiating the civil action against a person subject to subsection (a).
(ii) CONTENTS.—The notification required by clause (i) with respect to a civil action shall include a copy of the complaint to be filed to initiate the civil action.
(iii) EXCEPTION.—If it is not feasible for the attorney general of a State to provide the notification required by clause (i) before initiating a civil action under paragraph (1), the attorney general shall notify the Commission immediately upon instituting the civil action.
(B) INTERVENTION BY FEDERAL TRADE COMMISSION.—The Commission may—
(i) intervene in any civil action brought by the attorney general of a State under paragraph (1) against a person described in such paragraph; and
(ii) upon intervening—
(I) be heard on all matters arising in the civil action; and
(II) file petitions for appeal of a decision in the civil action.
(3) INVESTIGATORY POWERS.—Nothing in this subsection may be construed to prevent the attorney general of a State from exercising the powers conferred on the attorney general by the laws of the State to conduct investigations, to administer oaths or affirmations, or to compel the attendance of witnesses or the production of documentary or other evidence.
(4) EFFECT ON STATE COURT PROCEEDINGS.—Nothing in this subsection shall be construed to prohibit an authorized State official from proceeding in State court on the basis of an alleged violation of any general civil or criminal statute of such State.
(5) COORDINATION WITH FEDERAL TRADE COMMISSION.—If the Federal Trade Commission institutes a civil action or an administrative action with respect to a violation of subsection (a), the attorney general of a State shall coordinate with the Commission before bringing a civil action under paragraph (1) against any defendant named in the complaint of the Commission for the violation with respect to which the Commission instituted such action.
(6) VENUE; SERVICE OF PROCESS.—
(A) VENUE.—Any action brought under paragraph (1) may be brought in—
(i) the district court of the United States that meets applicable requirements relating to venue under section 1391 of title 28, United States Code; or
(ii) another court of competent jurisdiction.
(B) SERVICE OF PROCESS.—In an action brought under paragraph (1), process may be served in any district in which the defendant—
(i) is an inhabitant; or
(ii) may be found.
(7) ACTIONS BY OTHER STATE OFFICIALS.—
(A) IN GENERAL.—In addition to civil actions brought by attorneys general under paragraph (1), any other officer of a State who is authorized by the State to do so may bring a civil action under paragraph (1), subject to the same requirements and limitations that apply under this subsection to civil actions brought by attorneys general.
(B) SAVINGS PROVISION.—Nothing in this subsection may be construed to prohibit an authorized official of a State from initiating or continuing any proceeding in a court of the State for a violation of any civil or criminal law of the State.
(d) Definitions.—As used in this Act—
(1) the term “place of short-term lodging” means a hotel, motel, inn, or other place of lodging that advertises at a rate that is a nightly, hourly, or weekly rate; and
(2) the term “State” includes any territory of the United States, the District of Columbia, and the Commonwealth of Puerto Rico.
(e) Effective Date.—Subsection (a) shall take effect on the date that is 30 days after the date of enactment of this Act.
Introduced Sep 25, 2019
116th Congress (2019–2021)
Status
Died in a previous Congress
This bill was introduced on September 25, 2019, in a previous session of Congress,
but it did not receive a vote.
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