No trend has guests and hotels more divided than resort fees. The mandatory charges are becoming more common in some areas of the world, much to consumer’s dismay.
Booking.com, however, is making a bold move, notifying hotels around the world that it will begin charging commissions on any resort fees. Commissions will be charged on top of other fee-based services such as Wi-Fi as well as the hotel’s base rate.
It is the first known time a major online travel agency has charged commission on resort fees.
Resort fees are separate mandatory fees charged to guests on top of a hotel’s base room rate. They are controversial and the cause of an ongoing battle between hotels and guests. By keeping base rates low, properties can look more appealing on price comparison sites, and reducing the commission paid to the online travel agencies.
The fees have been banned in many countries, notably so in Australia, and European Union countries.
Under Australian Consumer Law (ACL) it is illegal to charge mandatory fees if not reflected in a total up-front cost. Hotels and other companies who break this law face harsh repercussions.
In the United States, however, there is no legislation allowing or prohibiting resort fees. The US Federal Trade Commission was investigating resort fees in 2012 but stopped short of making any significant changes, even though they concluded that charging resort fees separately without disclosing the price “likely harms consumers.”
As a result, these mandatory hotel charges keep rising. In the last year, they went up 11 percent and now average $32 per night. The Federal Trade Commission estimates that resort fees generate $2.5 billion (USD) a year for hotels.
Booking.com is now trying to fight the resort fees themselves. The goal is to be more transparent to customers, being open about the total price which guests will pay at the property.
Booking.com’s commission on hotel resort fees is expected to begin region by region. US hotels, however, won’t have long to prepare, with the changes expected to take place in June.
Could this mean the end of resort fees?
A large reason for resort fees existing in the first place is to dodge online travel agencies’ commission. For this reason, there is a high likelihood that hotels in the US will push back. Alternatively, Booking.com’s move could set the trend and lead to an end in booking fees, where all properties disclose the full prices to guests.