Hotels are hiding room rates in “resort fees,” but the Feds have taken notice

AGs in 46 states are looking into the practice

TRD New York /
Sep.September 22, 2017 09:10 AM

Crowne Plaza Times Square

More hotels charge carefully hidden resort fees as they face growing competition from Airbnb and tumbling room rates.

The number of hotels charging such fees increased by 26 percent last year while the average fee grew 12 percent, according to Long common in beach resorts and casino hotels, resort fees are now spreading to big cities. For example, the Crowne Plaza Times Square charges a fee of $30 per night, the Wall Street Journal reported.

Attorneys general in 46 states are looking into the practice because resort fees often aren’t advertised, leaving consumers in the dark over how much their room costs.

“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,” D.C. Attorney General Karl Racine told the Journal.

Fees and surcharges will total about $2.7 billion this year, according to Bjorn Hanson, a professor at NYU’s hospitality program. That’s a 35 percent increase from five years ago.

Hotels in New York City have been particularly hard hit by competition from short-term rental website Airbnb and as well as a surge in new hotel supply. Manhattan’s hotel revenue dipped for the fourth straight winter to $164 per room. [WSJ]Konrad Putzier

Related Articles

250th Issue

The Real Deal celebrates 250 issues

From left: Publisher and founder Amir Korangy, Editor-in-chief Stuart Elliott and VP of Corporate Development Yoav Barilan

TRD’s founders share war stories from over the years

Neir’s Tavern (Credit: Google Maps)

City’s oldest bar, of “Goodfellas” fame, gets last-minute lifeline

Neir's Tavern (Credit: Google Maps)

Landlord to bar owner: You don’t have to go home but you can’t stay here

Donald Trump and the Trump Hotel in Washington D.C. (Credit: Getty Images)

Deadline is set for bids on Trump’s DC hotel

729 Seventh Avenue (Credit: Google Maps)

Lawyer argued façade was safe 3 months before fatal accident

Bill Ackman, LeBron James, and Arnold Schwarzenegger with 787 11th Avenue (Credit: Google Maps and Getty Images)

Celebrity property group caught in $11M construction dispute

Renderings of The William Vale and Denizen Bushwick (Credit: iStock)

All Year’s rating outlook turns negative as bondholders reject two amendments