Resort Fees Still Are Wrong: Some Things Do Not Change

By Robert McGarvey

Maybe it is because I now have gotten my second jab but suddenly I am again thinking about travel related issues and in my face is a new Travelers United lawsuit against MGM that flatly claims: MGM is lying about the costs of an overnight stay in their hotels.

Ouch.

The suit claims that MGM practices deceptive pricing because it “hides” the resort fee it slaps on its room nights. This adds up to big bucks – “hundreds of millions of dollars” in the past decade, per Travelers United, a traveler advocacy group based in Washington DC.

Reported Travel Weekly: “The organization claims that MGM Resorts currently charges a resort fee at all of its U.S. properties, which include the Maryland-based MGM National Harbor, located just outside of Washington, as well as the MGM Grand, Bellagio, Aria, Mandalay Bay, New York-New York and Luxor properties in Las Vegas, among others.”

Resort fees add up.  Travelers United pointed to a room night at the Luxor that cost $29 in July 2020.  The resort fee was $35 per night.

Travelers United further claims that in the pandemic resort fees have not been reduced, although some of the services and amenities the fees supposedly cover have been reduced or outright eliminated.

Of course there is nothing new about this story.  As far back as 2013 I wrote about “resort fee scams” for TheStreet.  It’s a topic I have returned to many times – 2014, 2016, 2019 and many more.

The only things that have changed is that more hotels and resorts charge them and the amounts have steadily increased.  The $19 fee of 2013 now is twice as much and, bar the door, as many hoteliers drift nearer insolvency in the Covid era expect that there will be still more and higher hidden resort fees, urban amenity fees, and who knows what else they will be called.

The other reason hoteliers do this – and I have asked many – is their assertion that the competition does it.  That is, the competitor down the road deceptively advertises a room price (by failing to disclose the resort fee) and therefore the competitor says he is obliged to do likewise or risk losing the business because consumers will take the lower price.

There is not an abundance of evidence that says this is true, especially not at higher price points.  Many guests might opt for a $99 per night room over one priced at $104 – but it just is not proven that guests would opt for a $370 hotel room over a $400 room on the basis of price alone.  So a core defense of hidden resort fees is unproven.

Also true is that hotels could clearly disclose that there is an additional fee for a bundle of services for those who opt in. Just as there are extra fees for those who use the resort or hotel WiFi in many cases (although in some cases that is bundled into a resort fee, even when the guest has no intention of using the pool, the gym, etc).

Clearly the system is based on deception and is just wrong.

But still the fees persist.

How do they get away with this?  We don’t complain and, at least for the past four years, there was no appetite in Washington, DC for taking away hotelier revenue streams.  The latter may change with a new administration but what probably won’t change is our passive acceptance of deceptive advertising.

This shoe is on our feet.  It’s up to us to demand changes.

We can also try to duck the fees. The Points Guy notes that many Las Vegas stays that are paid for with points are exempt from resort fees. That includes IHG, Hyatt and Hilton.

Another way – used by me on multiple occasions – is to book into an organization’s block of rooms for a meeting and, often, the meeting planner has negotiated a zero resort fee for attendees. That will continue if only because meetings are likely to return to Las Vegas in slow motion and resorts will be fighting for them.

But you are on your own when it comes to ducking resort fees in locations that are primarily leisure focused (as more will be in 2021 and well into 2022).  There won’t be a large corporate meeting planner that has your back.

Your other option: badger your Senators and members of the House to take action.  In 2016, Missouri Senator Claire McCaskill introduced a bill that would have blocked hidden resort fees.  It went nowhere and McCaskill lost her seat in 2018 – her stand on resort fees had no impact on that outcome.

But it could come up for a vote in the next two years, very possibly with different results in both the Senate and the House.

Remember, nobody is saying hoteliers can’t charge resort fees.  Just that they have to disclose the charge before it lands on our bill. It is just about impossible not to support that.  So write your legislators  They just may act.

What about the Travelers United suit? I applaud the effort – and maybe it will prevail. But why wait when we can take our own action?

Get busy writing your reps!