Mandatory Resort Fees Reach $2.04 Billion in 2015, Grew 35%

Mandatory Resort Fees Reach $2.04 Billion in 2015, Grew 35%
Travelers United Study Finds 1,671 Hotels in U.S. Charged Resort Fees
Average Resort Fee Increased to $24.93 in 2015

January 12, 2016 – A Travelers United study of online listings found 1,671 hotels and lodging sites in the U.S. charged resort fees, but did not include them in the nightly lodging rate advertised. The number of listings, gathered in October 2015, grew by 40.3 percent over the 1,191 hotels listed online in December 2014 that charged resort fees.

The non-profit consumer group estimates that consumers paid $2.04 billion in mandatory resort fees in 2015, based on its analysis of publicly available data and analyst reports (see below for sources). The estimate of consumer spending on mandatory resort fees grew by 35 percent compared to the $1.51 billion in mandatory resort fees in 2014.

The average mandatory resort fee reached $24.93 in October 2015 hotel listings online, a 30 percent increase over the $19.20 average resort fee of online listings in December 2014. Resort fees in Florida were highest, with an average of $28.63 across 549 hotel listings.

Owners of hotels both large and small all across the country are increasingly turning to resort fees to boost room revenue. Travelers United estimates that resort fees accounted for 16.6 percent of revenue collected in 2015 from consumer room bookings, excluding optional fees and non-room spending, up from 13.3 percent in 2014.

Travelers United is asking the Federal Trade Commission to require hotels and resorts to include all mandatory fees in the room rates they advertise. The FTC warned hotels in 2012 that excluding mandatory fees in online listings may violate a ban on deceptive practices.

“If the fees are mandatory, they must be included in the nightly rate advertised,” says Charlie Leocha, founder and chairman of Travelers United. “The FTC must enforce the ban on deceptive practices that Congress wrote into the law. Excluding these fees harms consumers who cannot comparison shop effectively, and penalizes honest hotel owners.”

The American Hotel & Lodging Association says mandatory resort fees pay for “a range of hotel amenities, from pool use, gym access, towel services, to Wi-Fi and newspapers.” Major tourist destinations such as Hawaii, Las Vegas, Miami and San Diego, have the highest concentration of properties that charge resort fees.

Travelers United and the non-profit North Carolina Consumers Council wrote each member of the North Carolina congressional delegation and the NC Attorney General Roy Cooper (D) in July 2015 to ask for their help in urging the FTC to take action. Travelers United also called on Florida Attorney General Pam Bondi (R) in August 2015 to enforce state laws that ban deceptive and misleading business practices that harm consumers.

The Travelers United estimates are based analysis of publicly available reports: “The Lodging Study Hotel Trends” and “Lodging Industry Profile,” both released by the American Hotel & Lodging Association in 2014; the Hotels.com Hotel Price Index reports; and “lodging forecast” by PwC US in May 2015 that estimated “revenue per available room.”

Fast Facts

The following are based on a Travelers United study of online listings in December 2014 and October 2015.

· $2.04 billion in mandatory resort fees paid by consumers in 2015.

· 14.4 million room nights, equivalent in cost to the amount of resort fees paid.

· $24.93 was the average mandatory resort fee in October 2015, an increase of 30 percent over the $19.20 average resort fee of hotels listed online in December 2014.

· 1,671 hotels listed online in October 2015 charged resort fees, up 40.3% compared to 1,191 hotels listed online in December 2014 that charged resort fees.

· 1,221 hotels listed online in October 2015 charged $10 or more in resort fees.

· 549 Florida hotel listings online in October 2015 that charged an average of $28.63/day in mandatory resort fees.

· 123 Hawaii hotels listed online in October 2015 that charged an average of $21.42/day in mandatory resort fees.

· 191 California hotels listed online in October 2015 that charged an average of $17.21/day in mandatory resort fees.

· 150 Las Vegas and Nevada hotels listed online in October 2015 charged an average of $20.68/day in mandatory resort fees.

· 80% of 1,100 registered voters surveyed nationwide in July 2015 believe hotels should be required to include all mandatory fees in the nightly rate they advertise to enable consumers to comparison shop online.