Why Congress needs to pass bipartisan resort fees legislation now!

Bipartisan resort fees legislation is needed today.

Just before the US Senate left for an August recess, two Senators, Democrat Amy Klobuchar of Minnesota and Republican Jerry Moran, introduced bipartisan resort fees legislation. It is the Hotel Fees Transparency Act, which would establish federal guidelines for pricing transparency.

The bipartisan resort fees legislation would require anyone advertising a hotel room or a short-term rental to clearly show upfront the final price a customer would pay to book lodging. The Federal Trade Commission would be responsible for pursuing violations, and state attorney generals could also go after violators. So while it wouldn’t completely ban the fees, it would eliminate one of the major incentives for hotels, which is to make their prices look lower than they are.

Now, in reading social media comments on one of the bill’s sponsor’s posts, one snarky response was “Don’t you have anything more important to do?”

Politicians CAN multitask.

Even school lunches and Veterans’ benefits can be controversial. There’s something to be said for doing something that everyone can agree on and would benefit Americans regardless of their politics, and probably middle-class Americans.

Resort fees have expanded in the past decade.

In this post, for the sake of brevity, I’m using the term “resort fees,” but almost any hotel in a resort or urban area can decide to charge a mandatory extra fee. Sometimes it’s called a “facility fee,” or a “destination fee.”  Whatever they’re called, they’re dishonest and bad for travelers and bad for truth in advertising.

First, resort fees are incredibly regressive. Yes, travel is not strictly a luxury, and some people can’t even get away for a weekend to a hotel or resort. But most Americans aspire to vacations, whether a luxury resort or a weekend at a local casino.

And not only are resort fees flat — someone booking an entry-level room pays the same fee as someone booking a suite, but they are particularly high for inexpensive casino hotels.

In Las Vegas, for example, the Rio Hotel has rates as low as $20 a night in August and the hotel charged resort fees of $45 per day. No joke. The Flamingo has $35-a-night rates with $45-a-night fees. Excalibur charges $30 with a $3-a-night fee. More expensive hotels are not immune, but for example, when Bellagio offers a $299 room, the $45 fee, while annoying, doesn’t double the room rate.

Amazingly, hotels publicly defend these fees.  

“We continue to maintain that resort fees provide value,” said Alex Costello, the vice president of government relations for the American Gaming Association.

But what’s in the fees? At MGM and Harrah’s, “Property-wide high-speed internet access (public spaces and in-room), unlimited local and toll-free calls, and fitness center access for guests 18+.”  MGM mentions “airline boarding pass printing.” (Meanwhile, airlines increasingly push travelers to electronic boarding passes.)

Okay, maybe some people don’t have the Internet on their phones, but who needs unlimited phone calls now?  And while I’m sure some guests use the fitness center, thinking it’s not a high priority for those in Las Vegas. What the Las Vegas resort fees generally DON’T include? Parking, which is now more than $20 a day self-park at many hotels and $40 for valet.  (Although, to be fair, at some US hotels, parking is included in the resort fee, but it’s not consistent.)

Resort fees apply to complimentary rooms.

There are many other issues on resort fees. For example, they often apply even to “free” rooms when travelers redeem points earned as members of frequent guest programs, which seems particularly annoying as travelers feel they have earned those rooms.

Resort fees are also non-discountable.

Whether travelers book a corporate rate, a AAA rate, a preferred travel agency rate or any other discounted rate, the resort fee remains the same. It’s extra pure profit for the hotel. In some cases, preferred travel agents have negotiated “no resort fee” as a perk for guests, mostly at independent hotels, but that’s still relatively rare.

The fees are non-commissionable.

This may seem small, but in general, many hotel rates have a built-in 8-10 percent for travel agencies which book them online or brick and mortar. So $300-400 a week of a fee, if included in the rate, would mean at least another $25 or so for the booking agency. It adds up.

Hotels are attempting to make up for money lost during COVID.

The entire hospitality industry was hit hard by COVID, and no one should be against hotels raising their rates enough to make a profit.  But there’s no reason they can’t offer rates that reflect the actual mandatory price a traveler will pay for the room. Also, a side benefit if hotels raise prices by X-percent across the board would be less regressive than a flat fee.

And if hotels want to charge for an expensive perk that not all guests will use, like a fitness center, sports equipment, or even parking? OK, that would be fair.

The point is transparency and honesty.

Hotels should be better on both fronts. And since they won’t fix the problem themselves, it’s time for Congress to do so.

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