Mandatory, un-advertised (or under advertised) fees. Also known as, the ‘resort fee’. It is a controversial consumer issue for hotel and resort chains. If the price of a night is $50, plus a non negotiable fee of $20, then the final cost for the hotel room is actually $70. This is the line of thinking of many consumers, some of which are investigating litigating against major hotel chains.
The defense of resort fees? That by not wrapping them up into one price, the hotel can track expenses with greater ease, which benefits everyone. MGM Senior Vice President put it this way, “We’ve also heard positive feedback from guests who are happy that they are no longer paying a la carte for different services. They don’t feel nickeled and dimed.”
A large part of the controversy is that the now ubiquitous method of shopping for a hotel room involves thousands of hotel search and booking engines online. When comparing options in a list, the unavoidable true cost is not listed in the nightly rate. Thus, a customer can make a choice, and not realize that their room cost will actually be 15-40% higher than anticipated until they have either booked, or are just about to book.
The Past and Current Resort Fee Litigation
In 2012, the Federal Trade Commission officially warned 22 hotel operators that they needed to update their online rate quoting, as they had opted not to disclose the resort fees at all in their online booking process.
In 2015, a California resident began a class action lawsuit against the Las Vegas Sands Corporation, the operators of the Palazzo & Venetian. Benjamin Brin v The Palazzo is now a Federal class action that is underway. Another lawfirm recently issued a press release stating they are “investigating” claims that numerous hotel giants have engaged in the same practice.
Resort Fee History
Although resort fees have been around for a long time, mandatory resort fees are certainly on the rise. Starting around the 1990s, they began out of the largest resorts with huge facilities. Now, hotel hotspots from Miami to Las Vegas are adopting them at increasing rates. The American Hotel Lodging Association found that between 2012 and 2014, the amount of chains employing the practice doubled. Additionally, there are websites that track resort fees, and have stated that they are on the rise.
ResortFeeChecker.com holds that Steamboat Springs, Colorado has the lowest average at $3.99 per night, and Puerto Rico has the highest resort fee average, at $34.14.
Although it would be very unlikely for a law to address the issue, litigation may. Should the current Benjamin Brin case settle, the dispute would stall there. However, should the case be taken to judgement, a loss for the plaintiff would likely encourage and embolden more hotel operators to add fees. If the plaintiff side wins, it would likely inspire new litigation against hotel operators.