With Resort Fees Likely Here to Stay, Expect to Pay Between $35 to $40 Per Night
By Rod Clough, MAI President - Americas , HVS | February 23, 2020
As booking sites evolve in the way they help consumers understand what the total cost of a hotel room will be, the use of resort fees is likely to continue as time marches on. This vital revenue source for hotel owners is key to recouping sunk costs and keeping amenities in place.
We recently surveyed 50 resorts to uncover not only what their resort fee currently is, but what they offer to the consumer for this fee. It would be a best practice for any resort ownership and management team to regularly review what their specific competitive set is charging and offering for resort fees to make sure they remain competitive. As consumer awareness evolves regarding these fees and the amenities included, it behooves a hotel owner and management team to be on the forefront of communicating the charges in the most direct way possible and to offer the best array of benefits for the dollars spent.
Hotel Advertising Transparency Act of 2019
Resort fees are making headlines again, most recently with the introduction of the Hotel Advertising Transparency Act of 2019, which seeks to help consumers by mandating ultimate transparency when it comes to booking a hotel room and what the additional charges are really going to be. The bipartisan bill was presented by U.S. Representatives Eddie Bernice Johnson of Texas (Democrat) and Jeff Fortenberry of Nebraska (Republican).
If passed, mandatory fees (taxes and government fees excepted) will need to be reflected in the advertised room rate of a hotel, not just at final booking, and will also apply to shared accommodation sites, such as VRBO and Airbnb. For shared accommodations, cleaning fees and other non-tax fees would need to be disclosed initially via these booking sites. The Act would be regulated by the Federal Trade Commission and, most likely, enforced by each state's attorney general. If passed as initially written, the Act would take effect 30 days after the date of enactment. As of late November 2019, the Act had been referred to an energy and comis merce committee; the first hearing is not expected before 2020.
At the writing of this article, the outcome of the legislation was still unknown, but it will do hoteliers and online booking sites no harm to start down this path now. We have found that resort fees are not as obvious as they could be. At a minimum, when selecting a room type and rate, the additional resort fee should be noted alongside the rate quote wherever a room rate is shown on a booking site; a grand total rate plus (non-tax) fees should be illustrated to the consumer prior to booking.
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