Booking a room at the Bellagio on the Las Vegas Strip for July 4 will run you right around $351 a night, before taxes. But look it up online, and you’ll see something closer to $319.
The difference: a $32.48-a-night resort fee that pays for amenities like Internet access, the hotel gym and a daily newspaper. Use them or not, everyone who stays pays the fee.
Such fees, which can top $100, have been getting more scrutiny in recent years. Experts say that some hotels charge fees instead of raising their rates because it helps them stay at the top of online search results, where every dollar counts. But consumer advocates say they mask the true cost of a night’s stay, making it hard for travelers to pick the right hotel.
The Federal Trade Commission took aim at the fees in 2012, threatening 22 hotel chains with legal action if they didn’t start making the fees more clear. Staff attorneys at the FTC said that as long as the fees show up during the booking process and consumers see the total cost before paying, the hotels were doing enough.
But consumer advocates said they the FTC should have a stricter standard. Unless fees are rolled into the prices high-end hotels advertise and booking sites’ search results, they said, consumers will be stuck with a research project if they hope to comparison shop.
“It becomes a giant hassle for consumers,” said Charlie Leocha, founder of Travelers United, a consumer advocacy group. “It’s totally consumer unfriendly, and it’s totally unnecessary.”
About 7 percent of hotels charge resort fees, which have been around for years, according to the American Hotel and Lodging Association. Total fees in the U.S. cracked $2 billion for the first time in 2012, and reached $2.25 billion last year, according to Bjorn Hanson, who studies the industry at New York University.
Hanson said the fees are virtually pure profit for resorts, because they would have to offer most of the amenities they cover, like pools and phone service, with or without a fee.
Plus, it’s a way for hotels to charge extra without being knocked in search results. Raising the price of a room just a few dollars can put a dent in hotels’ market share, he said, but charging it as a fee keeps them competitive.
That’s because on most major booking sites, resort fees don’t show up in search results. Consumers usually don’t encounter fees until they choose a hotel and start to pick a room.
FTC lawyers said this week that that’s enough disclosure because consumers know the cost before they pay, but the announcement roiled consumer advocates, who were pushing the agency planned to go further.
“We took the position that information needs to be upfront, but whether it’s expressed as one dollar figure or two dollar figures, we were not going to tackle that,” Mamie Kresses, a senior attorney at the FTC, said in a presentation to industry and consumer representatives.
In some places, resort fees are difficult to avoid, according to data compiled by ResortFeeChecker.com. In Snowshoe, W.Va., nearly 9 in 10 hotels charge a mandatory fee. In Las Vegas, more than 4 in 10 do.
They range nationwide from a few dollars a night to more than $100, but like the Bellagio, most hover around $20 or $30.
Executives at MGM Hotels, which owns the Bellagio, defended their fee, saying it’s cheaper than charging individually for amenities. And even though their Web sites don’t advertise the total price, they said they’re not trying to hide the fees.
“It is not in fine print, and it is not in small print,” said Micah Richins, MGM Hotels’ senior vice president of revenue management, “but it is in bold print.”
Robert Gilbert, president of Hospitality Sales and Marketing Association International, said the fees can give resort operators steady revenue to pay for amenities even as room rates fluctuate customer-to-customer and season-to-season.
Leocha, of Travelers United, said he planned to push the FTC to change its policy. Like other consumer advocates, he says the practice won’t go away unless regulators step in. Advocates say that’s because hotels that roll mandatory fees into their room rates would be hit in search results.
“All too often, it turns out that the good guys have no choice but to join the bad guys,” said Ed Perkins, a Tribune-syndicated travel columnist who opposes the fees. “That’s not a situation I think we’d like to see continue.”