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A Costly Practice

Marriott, Lodging Industry Under Fire In DC Lawsuit Regarding Resort Fees

Monday, July 29, 2019
Dennis Nessler
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As we know things can change pretty quickly in the lodging industry, but then again...When I began covering hospitality some 16 years ago one of the hot-button issues was resort fees. In case you’re not familiar, these are additional charges that ‘resort’ properties add to the daily rate for the ‘right’ to use certain amenities and facilities. And these fees can be significant, often to the tune of $40 to $50 a night or more.

Here’s the problem, these hotels don’t tell you about it when they quote you a rate so it’s no surprise this upsets many consumers. It’s the very definition of being nickeled and dimed and even those consumers who can afford it don’t like it. Regardless of how nice your stay may be no one feels good about being asked to pay for ‘privileges’ like swimming in the pool or using the gym.

This issue is front and center again for the industry as Marriott International is being sued by the District of Columbia alleging that the company violated consumer protection laws by charging fees that are not disclosed up front to guests. The lawsuit claimed that 189 Marriott properties worldwide impose fees ranging from $9 to $95 a day.

Over the years, these fees were typically confined to more resort type locations throughout the country but now they have infiltrated more urban markets, such as Washington, DC. And that may be what ultimately does these practice in.

While the company declined to comment on the pending litigation, Marriott CEO Arne Sorenson defended its position in an interview with LinkedIn late last week.

“You’ve got resort fees in hotels, baggage fees in airlines. None of us as consumers necessarily love it. What we’ve tried to do is be very transparent with disclosure. Because from the first moment – when resort fees were first started a decade ago – they were a way of saying let’s fold in the waterfront, paddleboard rental, or the bike rental, or other things that are a part of the package,” he said.

But they’re clearly not transparent. You can fold in whatever you want, just let the consumer know you’re doing it. Marriott was the focal point of this suit most likely because it is the biggest player but this deceptive practice extends throughout the industry and to many brands.

What’s worse is all these brands were warned. In 2012 the Federal Trade Commission sent notices to hotel companies, including Marriott, discouraging the use of ‘drip pricing,’ as it violated consumer protection laws. Clearly, more definitive action needed to be taken by the FTC as the warnings went unheeded.

In an age of transparency and many brands and owners complaining about third-party intermediaries it seems inconceivable that resort fees are a still an issue. The worst thing about resort fees is they violate the inherent trust the consumer has and leave a bad taste in their mouth.

Here are a couple of pretty simple solutions. One, you let consumers know the full, actual price of the stay when they book a room. If that hurts your so-called ‘value proposition’ or sales pitch so be it. Two, give guests the option of using these facilities and services you’re charging for. Let them know when they check in that it’s going to cost them to use the pool or spa or gym. They may not love being charged for it but at least they’ve made the decision and will not be surprised.

Hiding behind resort fees is just wrong, particularly a time when the industry is fighting for every dollar for consumers with more options, such as the Airbnb, for example. Perhaps the AH&LA--which has been very active in fighting on behalf of the industry against Airbnb--can help take up the fight to eliminate resort fees. I understand the association was created to act on behalf of the industry and not necessarily consumers, but at the end of the day wouldn’t it be in the industry’s best interest?

Meanwhile, for the other brands and hotels still charging these fees, here’s some advice: Be proactive and don’t wait for the next lawsuit to come to you. Get rid of the resort fees now once and for all.

Dennis Nessler    Dennis Nessler
Hotel Interactive®, Inc.
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