Why hotels add resort fees to rooms you already paid for

HostI was looking at a trip recently and found a great deal on a room. But by the time I got to the last screen, the price had jumped by forty bucks a night for something called a facility fee. It feels like a bait and switch. Why can’t they just tell us the real price from the jump?

GuestIt's a shell game, and it comes down to how we shop for things online. Most of us go to a big travel site, type in where we want to stay, and then sort by the lowest price. The hotels know this. If a hotel lists a room for two hundred dollars, but their neighbor lists it for one hundred and fifty plus a fifty dollar fee, the second hotel wins. They show up first in the search results even though the final cost is exactly the same. They call this drip pricing. They let the extra costs drip out slowly as you click through the booking so that by the time you see the real total, you have already spent ten minutes filling out your info and you're less likely to start over.

HostBut I have seen these fees at hotels in the middle of a big city where there's no beach and no pool in sight. Calling it a resort fee feels pretty bold when the only extra thing I'm getting is a slow internet connection.

GuestYou're right, and that's where the name game gets even craftier. If you're in a city, they might call it a destination fee or an urban fee. In some cases, it's just an amenity fee. They claim this covers things like the gym, the local phone calls, or the bottle of water in your room. But here is the thing. Even if you tell them you won't use the gym and you have your own water, they usually won't take the charge off. It's a mandatory cost that has nothing to do with what you actually use. It's just a way to break the price into two parts so the first part looks smaller.

HostThat sounds like they're just lying about what the room costs. If I have to pay it to get the key, it's just part of the room rate. Is there some tax reason they do this, or is it purely about tricking the search engines?

GuestIt's partly about those search sites, but there's a hidden money trail too. When a hotel sells a room through a big third party travel site, they have to pay that site a cut, like a finders fee. Usually, that cut is based on the room rate. But for a long time, hotels didn't have to pay a cut on the fees. So, if a hotel shifts forty dollars from the room rate over to a resort fee, they get to keep more of that money for themselves instead of handing it over to the booking site. It's a way for them to shave down the commission they owe.

HostWait, so the big travel sites are getting cheated too? I would think they would be the first ones to complain and shut this down.

GuestThey have started to push back because they realize it makes their customers angry, but it's a standoff. If one travel site starts adding all the fees into the main price while the other sites don't, the first site looks way more expensive. Nobody wants to be the first one to blink. So instead, the fight has moved to the courts. In the last few years, several states have sued the big hotel chains, saying these fees are misleading and break consumer laws.

HostDoes that mean they're actually going away? I feel like I still see them every time I try to book a weekend away.

GuestChange is finally coming, mostly because of new laws. California just started a big rule that says businesses have to show the full price upfront, including all those mandatory fees. Since many hotels are part of huge national chains, they're starting to change their websites for everyone so they don't have to run two different systems. You might notice that when you search now, some big names have a little box you can check to see the total price including taxes and fees. It's not perfect, but it's a lot more clear than it was two years ago.

HostI still don't get why they don't just raise the price of the room by ten percent and call it a day. It seems like a lot of work to make your guests feel like they're being squeezed for every nickel.

GuestIt's a bet on how our brains work. We're very sensitive to that first number we see. Even if we know deep down that there will be fees, that one hundred dollar headliner keeps us on the hook. And for the hotels, those fees have become a huge part of their profit. We're talking billions of dollars a year across the whole industry. When a hotel finds a way to add a fee that almost everyone pays but that doesn't look like a price hike, they're going to hold onto it as long as they possibly can.

HostSo, if I see one of these on my bill and I never used the pool or the gym, is there any point in fighting it at the front desk?

GuestIt's getting harder to fight because they put it in the fine print when you sign up, but some people still have luck. If the Wi-Fi didn't work or the pool was closed for repairs, you have a much better case. The most powerful thing you can do is look for the hotels that proudly say they have no hidden fees. They're starting to use that as a way to win over frustrated travelers.

HostIt's wild that we have reached a point where just telling someone the real price is a special marketing feature.

GuestMany hotels now charge a fee for the high speed internet even though the basic web access is supposed to be covered by the resort fee you already paid.

HostThat forty dollar room charge feels a lot heavier when you realize it's just a way to win a race to the bottom of a search page.