A major part of so-called drip pricing appears to be a thing of the past at the world’s largest hotel company.
In recent years, resort fees have often topped the list of travel annoyances, as these fees — which sometimes approach $100 a night — have not typically been included in the initial listed nightly rate for a hotel.
U.S. President Joe Biden targeted this practice in his State of the Union address earlier this year, and Marriott was even the target of a Pennsylvania attorney general’s investigation into how the company handled resort fees.
Marriott eventually settled with the Pennsylvania AG. While Marriott maintained it was always transparent in how it charged the fees (often in a blue box noting the added fee at the top of a booking window), the company now bundles the resort fee into a rate.
A sample booking for New York City Marriott hotels this week shows the Times Square Edition, Renaissance New York Times Square Hotel, the New York Marriott Marquis and other Marriott-affiliated hotels in the area included the “destination amenity fee” into the nightly rate and noted such a fee was part of the overall charge.
The fee transparency goes beyond just online bookings, however. All rate displays for a Marriott booking have to now include resort or destination fees, and call center agents also have to include the fees in their overall rate quotes, A View From the Wing reported.
Marriott and all its competitors charge resort and destination fees, but if Marriott now bundles its pricing, does that mean the industry will follow suit?
Marriott CEO Anthony Capuano defended the company’s overall transparency on a recent company earnings call, but he didn’t divulge whether or not he felt the overall industry would follow suit.
“It is not as if those were hidden somehow. We’re simply further clarifying and enhancing that transparency,” Capuano said on the company’s first quarter earnings call earlier this month. “I will leave it to the state [attorney general] around the rest of the country for the rest of the industry. But I am pleased that we will lead the industry in terms of the transparency of our disclosure for our guests.”
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Who’s next?
This isn’t the end of resort fees from Marriott or any of its competitors — and it isn’t clear other hotel companies are going to immediately follow Marriott’s lead.
Sample bookings throughout the month in cities like New York City and Boston showed Hilton, Accor, IHG and Hyatt hotels all charged resort or destination fees but didn’t include them in the initially displayed rate.
They did all note the fee before checkout, however.
Marriott’s sole status as a resort fee-bundler might eventually change, as there’s speculation additional lawsuits from attorneys general in states like California and Texas as well as the District of Columbia might inspire other hotel companies to settle a la Marriott did with Pennsylvania.
Resort fees: A cash cow travelers hate
While resort fees are targeted under Biden’s proposed Junk Fee Prevention Act, Capuano previously defended Marriott’s handling of resort fees by noting the company always labeled the added charge during the booking process.
However, an audit included in the Pennsylvania lawsuit over Marriott’s resort fee-charging hotels over the last five months of 2015 indicated only 67% of Marriott-affiliated properties that charged resort fees were disclosing the fee at the time of a reservation.
Marriott made at least $206 million off resort and destination fees at its self-managed resorts since 2012, according to the Pennsylvania lawsuit. These charges ranged from $9 to $95 a night.
The curious carveout
Online travel agencies like Expedia and Priceline continue to display resort fees independently of an overall nightly rate.
If more hotel companies migrate to Marriott’s model, and online travel agencies show a perceived lower rate — that becomes a potential competitive advantage (at least at face value) in the ongoing OTAs vs booking direct battle. Hotel companies always prefer travelers book directly, as it means they aren’t having to fork over a percentage of a discounted nightly rate to an outside brand like Expedia.
Keep in mind: Booking with an OTA usually means you won’t earn loyalty points for your stay.
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