Experts Say MGM’s New Resort Fee Might Be Good for Travel Agents

Just when we thought hotel resort fees couldn’t get any worse, they did — and not surprisingly, it started in Las Vegas, a city that has never met a resort fee it doesn’t love. Last week, a new survey ranked Vegas second in the nation for these add-ons.

Still, this weekend, MGM Resorts expanded a mandatory 20 percent fee for spa services to include all its Las Vegas properties, including the Aria, Bellagio, Delano, Excalibur, Luxor, Mandalay Bay, MGM Grand, Mirage, New York-New York and Vdara. To add insult to injury, the company noted that while “a portion of the service charge is dispersed to the spa and salon staff members who served you,” the balance is an undefined “administrative fee,” which the company will simply pocket, like it or not.

Though most guests likely would tip 20 percent to the spa staff in any case, this is not quite the same thing. It’s just the latest in a series of nickel-and-dime charges MGM has brought to Nevada that have been rolling like tumbleweed down the Strip, and spreading among and within cities across the U.S.

The new study, from ResortFeeChecker.com, found that through the end of July 2018, the number of hotels charging resort fees nationwide grew 14.5 percent year over year, and the average fee rose 10.1 percent. Florida hotels are the worst culprits in these nebulous — and many would say unnecessary, unfair, anti-consumer and downright annoying — fees; 146 hotels in Miami and 137 in Orlando tack extra charges onto their room rates. Next comes Vegas, at 107 properties; and New York, closing in fast at number three with 92. Myrtle Beach and Oahu round out the top five cities.

The average fee per night is $22.74, but MGM’s run $30 to $39, covering internet and fitness center access, local phone calls, and airline boarding pass printing; and travel agents report they can add as much as $100 per day to a client’s tab.

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As Resort Fees Increase, Travel Agents Talk Tactics

Consumers fight back
There has been some movement by government agencies to protect consumers from the fees; District of Columbia Attorney General Karl Racine is heading an investigation by the attorneys general of 47 states into the resort fees of a dozen major hotel chains, for example, but little seems to be getting done. Daniel Prywes, a partner at Morris, Manning & Martin, LLP, in Washington, D.C., told Travel Market Report that they are “looking at Marriott and other major hotel chains, but that has yet to result in any publicly known enforcement action.”

There also is a class action suit against Wyndham Hotels in Pennsylvania, “but the bottom line is that case is well short of a resolution”; and one against Omni filed in San Diego on June 21, 2018, which was dismissed on July 31. The Federal Trade Commission declined a request by Travel Market Report for a comment, though it did publish a report stating it “has not found any benefits to consumers from separately disclosed mandatory resort fees that could not be achieved by listing the total price and then disclosing the resort fee.”

“I don’t know if it’s the calm before the storm or if they [the state attorneys general] have put it on the back burner,” Prywes said. “But, I think they put a lot of effort into it and probably would want to have something to show for it. People don’t like resort fees, but they may be better than the alternative. If hotels can’t proceed as they are now, they might start debundling all kinds of services from the base room rate, and become like Spirit Airlines, where they advertise a low price but if you want a napkin it’s $5 more.”

Prywes also noted that while people “might not like” the fees, the court actions are aimed only at forcing hotels to disclose them prominently, not to do away with them altogether.

But are fees good for the channel?
For the most part, travel agents despise the extra work that dealing with the fees entails. “In certain areas, we have to be on the lookout for them (Hawaii, New Orleans, Miami). It is part of our jobs to educate our clients. I HATE hotel fees. I wish the hotels would just include them … much like I wish that the airlines would include bag fees. An educated and well-qualified client is a happy one. So, just be sure to let them know upfront, in writing, and all will be ok,” said Heather Howard DiPietro, of Travel Sales Group, LLC. 

Caroline Brooke Fridley takes another tack — on luxury bookings, she just eats the fee herself rather than nickel-and-diming customers. “I got a quote the other day on a $14,000-a-night villa at a Caribbean resort that has a resort fee of about $50 a night on top of that — an irrelevant amount in the scheme of the trip cost. But that actually makes it more infuriating to me that the property has the audacity to charge the fee (which I, of course, will ask them to waive if my clients proceed with booking). Talk about nickel-and-diming! If the resort won’t waive it, I will pay it myself; I would be embarrassed to even mention that fee to my clients.”

And indeed, as fees proliferate, it’s possible that some hotels will begin to differentiate themselves by advertising one all-inclusive price that does not nickel-and-dime customers to death, much as the river cruise industry has begun to do, Prywes said. “That would be easier for travel agents and would be a competitive advantage over hotels that don’t include it.”

In the end, he suggested, the proliferation of fees in the hotel industry may in fact be a good thing for the travel agent channel, as it has been in the cruise industry. “When a consumer books a hotel, he may not know that parking is an extra fee or if breakfast is included or if there is a free newspaper. It’s very hard to simplify the whole pricing to a single number that is easy to compare — and that’s good for travel agents. It makes it more difficult for consumers to book on their own. That’s why customers need a travel agent to get the best deal — and that’s a silver lining in the gray cloud.”