The Real Deal New York

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

AGs in 46 states are looking into the practice
September 22, 2017 09:10AM

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 resortfeechecker.com. 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