The resort fee debate continues

2024-02-05

It’s been almost a year since President Biden chided airlines and resorts for charging hidden fees. Different sectors of the hospitality industry found themselves at odds, with some defending the fees and others saying they should be prohibited.

Several developments have kept the issue on the front burner since the Biden address. Two U.S. senators introduced the bipartisan Hotel Fees Transparency Act in July. And in October, Biden introduced a proposed Federal Trade Commission law that would require businesses, including hotels, to disclose all pricing upfront. The agency has extended public comments through Feb. 7.

“Transparency is a big issue for the consumer,” said Stephen Miller, director of the Center for Business and Economic Research at the University of Nevada, Las Vegas. “If you go way back in time, when the resort fee was first introduced, people were finding that out when they checked in. That created all kinds of angst.”

Charged in addition to a base room rate, these fees pay for amenities such as WiFi, parking, shuttle service, bottled water, local phone calls, newspapers, copying services and access to spa and fitness facilities, industry representatives say. Consumer advocates argue that hotels use resort fees to make room prices appear lower in initial searches and prevent consumers from accurately comparing prices.

“The bottom line for the resorts is they’re trying to get more revenue, cash flow,” Miller said. “So in Las Vegas, it started some years ago with introducing parking fees and resort fees. The casinos and the resorts are about diversifying their revenue streams. They’ve done a pretty good job of that.”

Miller noted the conundrum of Nevada’s congressional delegation, most Democrats like Biden, who generally weighed in on the side of the resorts. “They don’t want to be against transparency, but they want to support the resorts,” Miller said.

In the midst of the debate, it was reported that MGM Resorts International raised its fees earlier this month.

According to the Las Vegas Review-Journal, current nightly fees are: $37 at Luxor and Excalibur; $42 at New York-New York, NoMad Las Vegas, Park MGM and The Signature at MGM Grand; $45 at MGM Grand, Mandalay Bay and the Delano; and $50 at Aria, Vdara, Bellagio and the Cosmopolitan of Las Vegas. That’s an increase of $2 to $6 across its properties, according to Miller.

“What MGM is going to be doing is monitoring the effect of this on their reservation stream,” Miller said. “If it turned out that their decision at the margin was a deal breaker, they’ll roll back the decision. With the parking fees, they put them on, took them off and then put them back on and then offered the window for the Nevada residents. That seemed to stabilize.”

According to longtime Las Vegas blogger Scott Roeben, hotels have gotten much better at disclosing resort fees. “They have always been perceived as ‘hidden’ or ‘surprise’ fees, but fee transparency has been in the news, so hotels have adjusted their practices accordingly. Nobody’s really ‘surprised’ by resort fees anymore, and most understand their origin and purpose,” Roeben wrote.

A Washington Post story last month suggested ways that consumers can get around fees: Seek out fee-free hotels; use hotel member loyalty points when booking for a possible break; or ask the front desk to remove the fee, especially if an amenity or service is not available during a short stay.

Miller said he doesn’t believe a fee-free resort is much of a market differentiator, given all the factors that go into a decision about where to book.

“It probably depends upon the income level of the person who’s coming,” he said. “Is it somebody who’s on a very tight budget? But if they’re on a very tight budget, they’re probably not staying on the Strip. They’re probably staying off Strip and driving their car around. But then they face the issues of the parking fees.”

For those looking to comparison shop resort fees, one tracker has newly updated information on fees throughout the Las Vegas tourist corridor.

Courtesy of Travel Weekly