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Search Expedia.com for a hotel room in Waikiki, and dozens of listings will appear with thumbnail pictures, brief descriptions and marked-down rates. But if you think the listings actually say how much you’ll pay for a room, think again.
Mandatory resort fees routinely add 10 percent or more to the price of a room, and they’re not listed on the page that lets travelers compare rates.
For hotels, the resort fees mean big bucks, adding up to an estimated $2.6 billion in 2016, according to one national study.
The hotel industry trade association says the fees provide customers with value and convenience by lumping fees for amenities into one cost. But regulators don’t like the practice because they say the mandatory fees make it harder for consumers to figure out how much they need to pay to stay at a hotel. And what about travelers?
“They’re getting screwed,” said Charlie Leocha, president and founder of Travelers United, a nonprofit advocacy organization in Washington, D.C. “What’s happening is that the government is allowing the hotels to engage in false advertising. It’s just totally dishonest.”
In many cases, the resort fee covers little more than access to the hotel swimming pool and fitness center, internet access, and use of the in-room safe and coffee maker.
“I think it’s totally offensive, and I think its duplicitous,” said Laura Begley Bloom, a travel writer and brand consultant whose clients have included Four Seasons Hotels and Resorts and the Las Vegas Convention and Visitors Authority. “I’m sure the fees are in the fine print somewhere, but it’s a sneaky way to make more money and cheat people.”
Consumers paid approximately $2 billion in resort fees in 2015, a 35 percent increase over the previous year, the Federal Trade Commission estimates. Bjorn Hanson, a professor with New York University’s Jonathan M. Tisch Center for Hospitality and Tourism, pegged the number higher, at $2.45 billion in 2015, and a projected $2.6 billion in 2016.
Although the American Hotel & Lodging Association says resort fees are on the decline and that only 7 percent of hotels charge resort fees, the trend does not seem to apply to Hawaii. The website resortfeechecker.com lists 56 Oahu properties with resort fees as of October 2016. One rough estimate, in a study by the travel website Travel-Hawaii.com, says 102 Hawaii hotels collected $270 million in resort fees in 2015.
Tourism industry experts cite several reasons for the popularity of the fees. For one thing, the fees in many cases are highly profitable, with many hotels pocketing about 80 percent to 90 percent of the fees collected, NYU’s Hanson reports.
In addition, the fees often aren’t subject to room taxes. Hawaii’s 9.25 percent hotel tax, for instance, applies only to room rental proceeds. Finally, hotels generally do not have to pay a commission on the resort fees to online travel agencies like Expedia.com, the American Hotel & Lodging Association says.
Expedia declined to comment on its commission arrangement or the assertion that the site’s property comparison page doesn’t let travelers see what a room actually costs at properties that charge mandatory resort fees.
“Mandatory resort fees are always at the discretion of a hotel,” Amanda Graham, Expedia’s senior manager for industry relations said in an e-mail. “We can’t comment on their behalf.”
The hotel industry, meanwhile, focuses on their benefit to travelers.
“Mandatory resort fees were created in an effort to provide consumers with the best value by grouping amenity fees into one cost,” the American Hotel & Lodging Association says in a statement provided by the group’s Hawaii representative in response to queries for this article. “If consumers were charged individual fees for all amenities, the cost would likely be prohibitive.”
The association says that guests on average receive $100 in value for fees that average $25 to $30.
When the fees were first introduced in the late 1990s, resort fees covered actual resort amenities, like tennis courts and beach clubs, Travel + Leisure magazine reported in a piece on the topic. “But about a decade ago,” T + L reported, resort fees “jumped the shark and began appearing at more properties to cover such services as daily newspaper delivery, printing of boarding passes, and even nightly turndown.”
And good luck objecting to the fees. Begley Bloom, a former deputy editor for Travel + Leisure who now writes a column for Forbes, recalls she first encountered a resort fee years ago at the Bellagio in Las Vegas.
“I remember trying to argue my way out of it because I didn’t use the fitness center,” she said. But, she recalls, “they wouldn’t budge.”
Now the fees are common in Hawaii. What’s not standard is the cost of the fees, or what they pay for.
Consider the Surfjack Hotel & Swim Club in Waikiki. Located on Lewers Street near the Ala Wai, the Surfjack charges a daily resort fee of $25, which includes a $10 daily dining credit at its Mahina & Sun’s restaurant.
The rest of the fee covers a bundle of perks consisting of welcome snacks; two bottles of water per day; morning coffee; a daily local newspaper in the lobby; local and toll-free calls; WiFi internet access; and the use of bicycles, board games, books, an in-room safe, and Swim Club totes and towels.
Valet parking costs another $35 a day. Tack parking and resort fees on to the $235 discounted rate advertised on line recently, and the amount a guest with a rental car pays for a room is more like $295, plus tax.
Nearby at the Queen Kapiolani Hotel on Kapahulu Avenue, Expedia recently had rooms listed for $155 per night. But a mandatory $15 resort fee tacked another 10 percent onto that. Included for the fee, according to the hotel’s Expedia listing, are pool access, business center/computer access, internet access, a newspaper, in-room safe and coffee, and beach loungers and towels.
The fee also covers “beach access” — apparently to the public beach, located a block away, according to Expedia. (The hotel’s website does not list beach access or the room safe among the amenities covered by the resort fee, but does mention a filtered water fountain in the hotel lobby.)
Officials at the Queen Kapiolani did not return calls for comment.
A problem with resort fees, federal trade regulators say, is that they make it hard for consumers to comparison shop. For example, the fees aren’t displayed on the price comparison pages of online travel agents like Expedia and Hotels.com, the FTC notes in its January 2017 study of resort fees. So to find out about a resort fee, a customer often must drill down to the hotel’s listing. Figuring out what the fee pays for can require more digging.
Similarly, some hotel websites don’t list the resort fees with their rooms rates, but instead put them in small print under the room rates, the FTC reported.
The FTC calls these techniques “drip pricing” and “partitioned pricing.” Drip pricing means advertising only part of a product’s price upfront and revealing more charges later as consumers go through the buying process. Partitioned pricing means divvying the price into multiple components without disclosing the total.
The pricing strategies mean consumers must do some work to figure out how much a room costs and the perks they’re paying for at just one hotel. Comparing these things among multiple hotels can be a major hassle, the FTC says.
“A consumer’s choice is either to incur higher total search and cognitive costs or to make an incomplete, less informed decision that may result in a more costly room, or both,” the FTC said.
Kelley Bryan of Bozeman, Montana, encountered drip and partitioned pricing while planning a stay with her family at the Royal Hawaiian hotel. Figuring out how much the room would cost required considerable research, and she had to know what questions to ask, Bryan said.
She figured out she would have to pay the property’s $36.65 resort fee ahead of time; however, the fee was not listed on an email confirming her reservation. Still, her research failed to spot a $40 daily parking fee.
The parking and resort fees tacked about $76 per day onto the $433.67 she paid for the room, not counting tax.
A spokeswoman for Starwood Hotels & Resorts in Hawaii, which manages the Royal Hawaiian, said the email Bryan received titled “Reservation Confirmation” was not actually the reservation confirmation, although the email began, “It is my pleasure to confirm your reservation.”
The resort fee was included in a different email, which was really the reservation confirmation, said Jean Dickinson, Starwood area director of communications.
As for the parking fee, Dickinson said that guests like Bryan who book directly with the hotel can call the hotel to ask about parking fees and that guests are also told about the parking fees upon check-in. (The fee is also on the hotel’s website.)
Bryan also says she didn’t know what the resort fee covered. For instance, she thought the baked goods brought to her room were a free perk, a sign of the superior service at the iconic Pink Palace of the Pacific. And while Bryan says the front desk clerk told her about the opportunity to have a free photo shoot and four-by-eight inch picture, she didn’t realize until after the trip that she had also paid for the one-day use of a GoPro camera, which she didn’t use.
“I am so bummed!” she said, when she saw the item later by drilling down on the Royal Hawaiian’s website. “I would have totally used that!”
While the resort fee covered the GoPro that Ryan didn’t use, it didn’t cover the beach chairs she and her family used.
The Starwood spokeswoman said Bryan’s party upon check-in was given a card or flyer listing all of the resort fee amenities. Travelers also can find the info on hotel’s website by gong to the “Rooms & Suites” tab and clicking on a heading labeled “Resort Experience Fee.”
Of course, amenities like beach chairs still come free at many places. At the Four Seasons Resort Hualalai on the Big Island, for instance, guests don’t pay extra to swim in the multiple pools or relax in the spa’s sauna. Hualalai also has gratis snorkel gear and poolside perks like fruit kabobs and Evian water spritzes. Guests don’t have to pay extra to use the in-room safe.
For luxury properties, charging an added fee simply does not make sense, said Scott Ingwers, regional vice president for Trump Hotels in Hawaii, operator of the Trump International Hotel in Waikiki, which does not charge a resort fee.
“When you get to the luxury end of the spectrum, the guest does not expect those fees to be added,” he said.
But critics of fees say there’s a fairness question that applies to travelers across the spectrum: Is it fair to make people pay for things they don’t use?
“I can’t tell you that,” said Dickinson, the Starwood spokeswoman, “but I can tell you the all-inclusive resort fee has been very, very popular.”
Civil Beat Reporter Anita Hofschneider contributed to this report.