Harrah's Entertainment last week announced it had dropped the daily resort fees from its newest Las Vegas properties, Planet Hollywood and the Westgate Towers, making it the only major hotel-casino operator on the Strip that doesn't impose the surcharge. Hotels editor Jeri Clausing talked with Michael Weaver, vice president of marketing for Harrah's in Las Vegas, about the decision.
Q: Why did you drop the fee?
A: The resort fee game is one we never actively engaged in. When we acquired Planet Hollywood, it had one. We eliminated it. We said, "Yes, it's a way to make money, but it's not who we are as a company." So we eliminated it there. And when we took over management of the Westgate Towers, we eliminated it there.
The company's unique selling proposition is based on service. Our competitors oftentimes have selling points based on how pretty the building is. We really believe consumers make their decision on where to stay based on their service experience.
So when you have a company that competes based on service delivery, charging a resort fee is in conflict with that kind of service-driven philosophy. I have yet to encounter a customer who paid a $20 resort fee with a smile on their face.
Q: Is that what the typical resort fee is these days in Vegas, $20 a day?
A: Yes. And the way it works in Vegas is, you are charged a fee whether you want it or not, and it includes items that you may or may not want. Our approach is not to charge a resort fee, and if a consumer wants to purchase something then it's at their discretion.
For example, one of the things that is [often] included as part of a resort fee is local phone calls. The vast majority of people who come to Las Vegas bring their cellphones. People stopped using the phone in their room a long time ago.
Some of the fees include high-speed Internet in the room. Our belief is that the majority of people who come to Las Vegas don't want to use their computers while they are on vacation. If they are on business, then they can pay for it if they want. But a lot of consumers also have [an Internet access] card built into their company [laptop], and they are not going to use your high-speed Internet.
So these inclusions ignore what consumers want to spend their money on when they are in Las Vegas. They want to spend their money on shows and food and gambling, not wireless Internet.
Q: But don't you have a lot of business travelers there for conventions?
A: We do get a lot of business travelers. At many casinos we offer a business traveler package they can buy that includes wireless Internet, newspaper delivery, a bundle of business services.
Q: So you have not eliminated service charges, just the blanket fee.
A: We let consumers purchase what they want. The thing that is happening now with some casinos, a very interesting dynamic that just started this month, [is] they have started to remove some of the inclusions but not lower the resort fee price.
The reason they are not going to eliminate the resort fee is twofold. First, they want to avoid paying commissions because you don't pay a travel agent or an online travel agency a commission on a resort fee. So a lot of casinos in Vegas add a $20 resort fee, then drop the hotel room price by $20. ... Then it also appears higher in the sort order on the OTA.
Q: Has your rate structure changed with the elimination of the $20 fee?
A: Yeah. But the rate that you end up being quoted ... is an honest reflection of what you are going to pay.
This column appeared in the Aug. 16 issue of Travel Weekly.
