Why hotels charge resort fees

The Andaz Maui at Wailea Resort, a Hyatt resort on 15 beachfront acres in Hawaii, is far from just a place to sleep. There are multiple pools, including a lagoon and three infinity pools. As part of the resort fee, you can also take a stand-up paddleboarding course, use the resort’s snorkel equipment and GoPro action camera and maybe even learn ukulele, hula or mixology.

It’s all marketed as complimentary — but it’s only sort of so. Andaz Maui is one of what the American Hotel and Lodging Association estimates is six per cent of all hotels that charge a resort fee. These fees run between $US20 ($28.45) and $US50 ($71.13) per night — and they’ve become one of the most controversial issues in the travel industry.

NerdWallet analysed more than 100 US hotels with January 2023 check-in dates as part of its 2023 Best-Of Awards to see which hotels have the best and worst fees. Among the hotels that charge them, the average resort fee was $US42.41, representing nearly 11 per cent of the overall nightly cost. The Andaz Maui’s daily resort fee is $US50 plus tax, which is above average. But because Andaz Maui’s nightly rates are also above average, the fee is about six per cent of the overall nightly cost to stay in January 2023, based on data gathered in December 2022.

And like most other resorts that charge such fees, the Andaz’s fee is not optional — even if you never use the amenities.

THE CASE FOR RESORT FEES

Resort fees may be a way for hotels to increase profits without necessarily charging guests more.

“Hotels claim that resort fees allow hotels to reduce the commissions paid to online travel agents,” according to the Federal Trade Commission’s 2017 report.

Most resorts pay travel agents a commission based on the nightly rate rather than the overall cost. A lower nightly rate plus resort fee reduces what the resort must pay to the referrer.

Some resorts do go all out on amenities, which makes the resort fee seem more justifiable. Hyatt’s Alila Napa Valley in Northern California wine country charges a $US55 nightly fee plus tax, which includes wine plus valet parking and the use of bikes and electric vehicle charging stations. The $US50 fee for the Ritz-Carlton Bacara, Santa Barbara in California covers amenities including yoga and water aerobics classes, electric bike rentals, guided beach walks and use of tennis courts.

Brittain Komoda, marketing manager at Andaz Maui, says splitting the fees might encourage holidaymakers to learn about the amenities offered and actually use them.

“We have cultural activities, water activities, GoPro rentals and other classes,” Komoda says. “We want guests to experience them and to know what they cost.”

It’s possible a tourist who otherwise would never pay separately to get on an outrigger canoe might do so because it’s included in the resort fee they paid, Komoda says. That activity might become their vacation highlight, leaving them with a more favorable memory of the resort.

And buying even a fraction of what Andaz Maui offers a la carte would likely be far more than the $US50 daily resort fee — which is charged per room, not per person, Komoda says. For example, renting a GoPro from a surf shop in Wailea costs about $US40 a day, and full-face snorkel mask rentals cost $US17 per person. Stand-up paddleboarding lessons on Maui run about $US150 to $US180 per adult.

“Our intention is to greet new and returning travellers alike with immersive experiences that sum to far more than our resort fee,” Komoda says.

THE CASE AGAINST RESORT FEES

But some hotels may claim resort fees cover basic amenities, like Wi-Fi or use of the room phone.

For travellers booking expensive rooms, the additional mandatory charge to cover perks that are advertised as “complimentary” can feel stingy and confusing. In 2012, the FTC warned 22 hotels that the resort fees were not adequately disclosed on their reservation websites.

Resort fee transparency has improved. In November 2021 , Marriott committed to displaying the total price — including room rates and other mandatory fees — on the first page of its booking website.

But at other resorts that separate fees from room rates, it can be difficult to understand the total cost.

“If resort fees were included in the room rate, consumers could compare rooms at different hotels by simply viewing the room pages at the hotel websites,” according to a 2017 FTC report . “With separately-disclosed resort fees, consumers would need to add the room rate to the resort fee and remember the total for each hotel under consideration.”

Dave Betham , general manager at Courtyard Oahu North Shore in Hawaii, says it’s for this reason that his property — which offers complimentary amenities and cultural activities including ukulele and hula classes — will not charge resort fees.

“We look at it from a guest perspective,” Betham says. “We like the idea that there are no surprises.”

AP



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