What is a Resort Fee and Do You Have to Pay It?

– What the heck is a resort
fee and do I have to pay it? This is a question I get
asked over and over again, particularly, on my
Las Vegas travel series and so I wanna take some time
to talk about resort fees, what they are, how you can spot them, and potentially, how you can avoid them. So resort fees, they can
come in many different names. Sometimes it’s called a resort fee. Other times it’s a destination fee. Other times it’s an amenity fee. Whatever it is, this is all the same fee. It is the fee that is added
on per night by the hotel. It is in addition to the room rate and it is in addition to taxes. Resort fees are not taxes. They are not put there by the government. They are put there by the hotel and the profit on resort fees
goes entirely to the hotel. Resort fees can range anywhere
from 10 to $50 a night. I’ve even seen some hotels in Florida that charge a $100 a
night per the resort fee. Sometimes, resort fees can be even more than the room rate itself. This particularly happens in Las Vegas, where you’ll book a hotel,
like the Circus Circus, with a $19 a night room
and a $25 resort fee. And I mentioned Las Vegas. The city that resort fees
are most prevalent in is Las Vegas, where all 62,000 hotel rooms on the Las Vegas strip are
subject to resort fees. When you check into a hotel
that has a resort fee, if you ask them, “What is this fee?”, they’ll typically tell you it includes a bunch of
amenities in the hotel. For example, it includes pool access. It includes pool towels. It includes gym access. It includes surfboard rentals. It includes the coffee maker in your room. It includes the coffee for
the coffee maker in your room. It includes a water bottle to use in the coffee maker in the room. These are basically a lot of things that used to just be free and used to be included in your room rate, but now, they’ve taken these things and just said “Well,
it’s not your room rate “that pays for these things. “It’s now this resort
fee that pays for it, “that you can’t opt out of.” You can’t say, “I don’t want
to use any of those things, “so don’t charge me the resort fee.” The hotel makes you pay the resort fee, whether you use those things or not, but they do give you
access to those things. Very nice of the hotel. So the thing that’s most
irritating about resort fees is they are often not
advertised very clearly. Oftentimes, they’re not
advertised as resort fees at all. Some booking engines don’t show them. Now, this has been getting
better over the years. More booking engines show them. More hotel websites show them. But still, they don’t show up at the beginning of the booking process, when you look at the room rates or when you’re looking at a search engine and you’re sorting by price. Instead, the resort fees show up all the way at the end
of the booking process, when you’ve got taxes
and all the other things. Consumer advocates refer
to this as drip pricing, where you start the hotel, start with a come-on price to bring you in and slowly drip in added
fees to add up to the price that the room actually is. Many consumer advocates
have also called resort fees the equivalent of charging
a second room rate. So you have the first
room rate, $20 a night, and you’ve got the second
room rate, $25 a night. That’s the resort fee, ’cause they’re essentially both room rates ’cause you can’t opt out of it. This kind of drip pricing
is actually illegal in many countries, including Australia and every country in the European Union. But in the USA, there are
no laws for or against it. So speaking of the USA, where did resort fees originate from, hmm? Well, they originated in
North America in 1997. That’s where most people point to it, where many resorts in North America started charging mandatory
fees for amenities regardless of whether the
guests use them or not. And it seems like everyday there’s more and more
hotels charging resort fees. Now, hotels in New York
city and Los Angeles, places that typically
aren’t considered resorts, are charging these mandatory fees. That’s why they call it something else, like a destination fee, an
amenity fee, a city fee. And to give you an example
of how this is increasing, in 2016, in New York
city there were 15 hotels that charge resort fees. And in 2018, there were 80 plus hotels in New York city that charge resort fees, so that number is growing exorbitantly. And it’s not just fancier nice hotels that are charging resort fees, all the hotels are getting in the act, including the Days Inn in Miami beach and even the Super 8 Motel
in Las Vegas, Nevada. Speaking of creative ways of
disguising the resort fee, the Life Hotel in New York
city describes their resort fee as the NYC mandatory city destination fee. It is not something that’s
mandatory from the city. It’s not imposed by the city. It is a fee entirely from
the hotel and not a tax. I’m pretty sure all consumers, including myself, hate resort fees, so why do the hotels do it? Well, I think there are three reasons. Number one, so that they
can get more revenue without increasing the room rate itself. And why is this important? Because the room rate gets
ranked on search engines. It gets displayed a lot
of different places. If a hotel increases the room rate, then it might not get displayed as highly in search results
in a lot of different places. So instead, they increase this resort fee. They keep increasing this resort fee and they hold the room rate constant or they decrease the room rate
and increase the resort fee. The second reason is so
they don’t have to pay as much commission to travel
agents or online booking sites. Why is this important? Well, because the commission
typically generated from hotels is typically on the room rate itself and not on any other fees or taxes. Now, some online booking
sites, like booking.com, have gotten wise to this and they’ve actually
started charging commission on the entire price, which includes fees and
not just room rates. And the third reason has to do with taxes and tax structures. Often, the room rate can be taxed at what’s called the
transient occupancy tax, which is something that
typically applies to hotels and fees are often taxed
at a sales tax rate, which is typically lower than the transient occupancy tax rate. And so, it’s a way of decreasing
the overall tax perspective and so, they think a way
of potentially making the overall room slightly cheaper because less taxes are being
paid on the total price. So that’s what I think,
but what do the hotels say? There was an article in Fortune
Magazine a few years back where they asked a few different hotels why they charge resort fees and it was interesting to
see some of these responses. The Arizona Grand Resort
and Spa in Phoenix says, “Studies have proven that travelers prefer “to book a lower room rate
and pay the resort fee on top “rather than to pay one
bundled higher price.” That’s what the hotel says. Is that what you think? Another hotel in Florida, The WaterColor Inn Resort and Spa, says, “By not including the resort
fee, we’re able to break out “all the amenities the guests
will receive with this fee, “an explanation that may be missed “if this fee was included
with the total rate.” So apparently, they charge resort fee just so they can explain some
of the amenities that you get. Do you appreciate that? But you know what, all
this resort fee frenzy it’s backfiring on the
hotels and the resorts. There was a recent article published in the Los Angeles Times
showing that stays in Las Vegas, visitation to Las Vegas
has actually decreased as all these additional fees
have been added by the hotels, that travelers really don’t
like to be nickel and dimed. They don’t like the resort fees. They don’t like the parking fees. And so, actually hotels
are seeing less revenue because of these resort fees. And some hotel rating
systems, including Triple A, are actually deducting
points off their ratings for hotels that charge resort fees. Now, why would Triple A
be reducing their ratings? Because Triple A says, consumers
don’t like resort fees. (gasps) What a surprise! It’s something in the future and I’ve already said in
pretty much every hotel that I talk about a resort fee, but I’m gonna consider docking
a half-topher for hotels that charge resort fees. Okay, so how do you avoid resort fees? Well, I mentioned it’s mandatory, so it’s not really easy to avoid, but I’d say there’s five ways
to avoid paying resort fees. The first one is to have some elite status with the hotel chain
that you’re staying at. For example, if you’re going to Las Vegas and you have Caesars Diamond Status, well, then at hotels that
are owned by Caesars, they’ll wave the resort fee because you have that high level status. The second way to avoid paying resort fees is to book your hotel with award points. Some hotel chains and some hotels, if you book your stay
entirely with award points, then they may not charge
you with the resort fee. Now, this isn’t a universal truth. Some chains will still
charge you the resort fee even if you have points. And then, sometimes may
be, if you book with points and you have elite status,
then they wave the resort fee. The third way to avoid the resort fee, and some people on the online forums report success with this, is simply asking for it to be removed, asking the front desk staff. If they don’t remove it,
ask for the hotel manager. This isn’t one that I’ve
employed simply because I don’t really like to
argue with front desk staff, but if that’s your style, this may be a way to get it removed. This often works well on hotels that have just started
to charge the resort fee. They often have some kind
of soft roll out of it, say where the first year,
if somebody disputes it, they’ll just take it off the
bill, but then at some point, hotels typically hold a pretty hard line and be like, “Nope, you can’t
get away from this fee”. The forth way to avoid
paying the resort fee is to dispute it with
your credit card company. If you found that the resort
fee was not advertised and you can prove it to
the credit card company, the credit card companies have been taking those off the bill. And that’s actually something
where this might be good because if it’s kind of a shady hotel and they get enough credit card disputes, that could increase the
fees they have to be or perhaps, even revoke
their merchant account because they’re not playing
fair with customers. And the fifth way to
avoid paying resort fees is to, frankly, just stay at a
hotel that doesn’t have them. That’s my preference. On my Las Vegas videos, I often tell people the way
to avoid paying resort fees is just not stay on the Las Vegas strip. Find a Marriot, find a Springhill Suites, find a Hilton, find a hotel
that doesn’t charge resort fee. You don’t like paying the resort fee? Find one that doesn’t charge it. Use your money to influence the behavior you like from the hotels. If people keep paying them
and they’re just fine with it, the hotels are going
to keep charging them. Well, if you’re going to Las Vegas, you might enjoy watching
my series on Las Vegas. Or if you’re looking to book a hotel, you might enjoy my video about how to get really
good deals on hotels. You’ll also find links
in the description below. I won’t say goodbye because I’ll see you
in one of these videos.


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