‘Resort’ Fees: Not Only for Resorts

The number of U.S. hotels charging resort fees has risen

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When Ajit Pillai checked into the Crowne Plaza Times Square in New York last month with his family, he was surprised to learn he would have to pay a $30 “resort fee” for each of the four nights of his trip.

He had grown accustomed to such fees at Las Vegas casinos and beach-front resorts, but didn’t expect to see the charge at a relatively modest, $260-a-night hotel in congested Midtown Manhattan. A hotel employee told him the fee was for two free drinks at the bar, the gym and a newspaper.

Elara by Hilton Grand Vacations - Center Strip [No Resort Fees] listed on Booking.com. The number of U.S. hotels charging resort fees has risen.

“It didn’t really have anything you would affiliate with a resort,” said Mr. Pillai, a maxillofacial surgeon from Brookfield, Wis.

InterContinental Hotels Group PLC, which owns the Crown Plaza hotel brand, and the hotel’s management group declined to comment on the fee. The hotel’s website says the “daily service fee” is meant to “enhance the overall guest experience.”

Resort fees tacked on to the advertised price of a hotel have long been a source of frustration in tourist destinations like Hawaii and Florida, where they ostensibly cover the cost of perks such as poolside cabanas or spa access. Now they are increasingly cropping up at hotels in big cities and even less-glitzy locales including Spokane, Wash., and Rapid City, S.D. Lower-priced chains such as Best Western and La Quinta Inns & Suites now add them to room charges at hotels near attractions like Disneyland or water parks.

Hoteliers say the fees go toward amenities such as “free” Wi-Fi, pools or gym access, while consumer groups and research by the U.S. Federal Trade Commission say separating such fees from advertised room rates hurts consumers.

The fees have attracted the attention of attorneys general in 46 states and the District of Columbia, who since last year have been investigating the way the industry advertises resort fees.

“We want the lodging businesses to simply present their full and accurate pricing right upfront, so the consumer can see what a room will cost them,” said D.C. Attorney General Karl Racine, who is leading an investigation with Nebraska Attorney General Doug Peterson.

Their probe includes Marriott International Inc., according to court filings. In a statement, Marriott said it fully discloses resort fees and has been cooperating with the D.C. attorney general’s request.

The number of hotels charging resort fees is up by 26% since last year and average resort fees have risen by 12% to $21.05 a night, according to data from www.resortfeechecker.com, a website that gathers data on resort fees and other mandatory charges by hotels. Nightly fees range from an average of about $30 a night in Las Vegas to $8.68 a night in Daytona Beach, Fla.

Cities with the biggest growth in hotels with resort fees over the past year are major urban markets such as New York, Los Angeles and San Francisco, as well as smaller beach markets such as Sarasota, Fla., and St. Petersburg-Clearwater, Fla., according to the site.

A study from Bjorn Hanson, a clinical professor at New York University’s hospitality program, estimates that fees and surcharges at U.S. hotels will total $2.7 billion this year, a 35% increase from five years ago.

The American Hotel and Lodging Association, a trade group for the hotel industry, says resort fees aren’t a common practice. In recent years about 4% to 7% of hotels across the U.S. charged such fees, a figure the group said has remained steady since 2000.

Paul English, co-founder of travel search site Kayak.com who now runs a travel site called Lola.com, said he was caught off guard by a $28 nightly “urban facility fee” upon checking in at the Clift Hotel in San Francisco last month.

He told the hotel staff he didn’t need the services covered by the fee—Wi-Fi, a discount at the restaurant and use of the gym—but he was told the fee was mandatory.

In a statement, SBE Entertainment Group, which co-owns the Clift, said customers who book directly through the company’s website get a “detailed preview of the cost, including any fees,” throughout the booking process.

Mr. English said he booked the hotel through Lola.com, and wasn’t aware of the fee until check-in. He said search sites such as Kayak or booking sites like Expedia.com have little control over the advertised prices, because they rely on hotels to supply information such as the room rate. The hotel industry has countered that third-party travel sites should improve disclosure of such fees.

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