Had you been one of the 1,500 or so people attending the 19th annual Lodging Conference at Phoenix's Arizona Biltmore last month, you would have witnessed hotel analysts mentioning that inflation-adjusted room rates aren't back up to prerecession levels and executives exhorting their fellow hoteliers to charge more for their rooms and stop leaving money on the table.
And, had you been staying at Scottsdale's Saguaro hotel eight miles east, you would have experienced one more way hoteliers are responding to this suggestion. There, added to the room charge and city, county and occupancy tax line items, was a $21-a-night resort fee.
This observation is not meant to pick on the Saguaro; the hotel was charming and funky, and the service staff couldn't have been friendlier. It's more about pointing out the trend of the dreaded "resort fees" that appears to be spreading from true resorts (resort fees at the 39-acre Arizona Biltmore run $28 a night) to more urban locales.
In fact, 2013 will mark the third consecutive year that hoteliers will have racked up record revenue in fees and surcharges, according to a study released in August by New York University's (NYU) Preston Robert Tisch Center for Hospitality, Tourism and Sports Management.
For U.S. hotel guests who are looking only at the top-line room rates without perusing the bottom-line fine print, the third time definitely isn't a charm.
Indeed, hoteliers are expected to charge $2.1 billion in fees this year, up from about $2 billion in 2012 and more than double what they charged a decade ago, according to the NYU report.
While some of that increase can be attributed to the rise in sheer numbers of rooms booked this year, most of that difference is from the ever-expanding list of surcharges, ranging from Internet and phone fees to room service and minibar line items to baggage-holding fees.
Nowhere does this appear to be more of an issue than in Las Vegas, where hotels have been gradually instituting resort fees since the crash of 2008. Now, properties along the Strip regularly charge between $15 and $25 a night in resort fees.
In fact, Caesars Entertainment, which had been holding out on applying resort fees, finally gave in and earlier this year started adding the fees at Strip properties such as Caesars Palace, Harrah's Las Vegas and Bally's Las Vegas.
As a result, a quick look at Caesars' website will reveal $25-a-night fees for Caesars Palace, $20 for Planet Hollywood and $18 for Bally's and the Flamingo.
MGM Resorts International has gone even pricier, charging $28 a night in fees for hotels such as the Bellagio and Aria. Book a room at Las Vegas Sands' Venetian and you'll be hit with a resort fee of $25 a night.
And while such practices appear most prevalent in Sin City, they do extend far beyond the golf and gambling resorts of the great Southwest. Caesars Atlantic City charges a $10-per-night resort fee, while the Hilton Orlando's is $20 a night.
Either way, resort fees don't appear to be dissuading visitors, at least as measured by the number of people who head to Las Vegas, which set a visitor record last year.
On the Strip, where resort fees are pretty much universally applied, occupancy through August was unchanged at 88%, while room rates were up 3%, to $119 a night, implying that Las Vegas hoteliers are already getting more bang for the room-rate buck, according to the Las Vegas Convention and Visitors Authority.
So is this a reason to cry foul? Yes and no. Record numbers aside, tourists booked about 1 billion room nights a year in the U.S., according to STR, which would suggest that the guest pays an average of just $2 a night in resort fees.
And Bjorn Hanson, the author of the NYU report, says the hotels have nothing on airlines, which have in recent years turned the concept of ancillary fees into a cottage industry and collect about 10 times the ancillary fees that hotels do.
In fact, consultant IdeaWorks said in a June study that global airline ancillary fees, in the form of baggage charges, preferred seating and onboard meals, jumped 20% last year, to $27.1 billion, and have doubled since 2009.
Of course, the difference is that airline ancillaries can be defended as offering flyers more choice in what they're willing to pay for, while resort fees amount to mandatory bundling.
Still, some hoteliers will say such fees enable them to avoid nickel-and-diming guests by tucking fees for additional services into a single line item rather than charging for each separately.
For example, the Saguaro says it charges the resort fee so it doesn't have to charge for in-room WiFi, on-site parking and other amenities. MGM says the fees also cover things like gym use, local calls, access to the properties' business centers and, yes, a free USA Today outside the guestroom door.
Of course, while they might be loath to admit it, hoteliers also use those fees to keep published room rates down. Indeed, the Saguaro's room rate was only about $10 above Phoenix's $120 nightly average, which isn't bad for a boutique hotel in Scottsdale. And while year-to-date U.S. room rates through the first half of the year were up 4% from a year earlier, according to STR, they're still hovering just below prerecession peaks.
Still, the fees can add up, and for a hotel that doesn't charge a ton for its room, the amounts can appear even more jarring. Tack a $25 fee onto a $400-a-night suite at the MGM Grand and the resort fee seems incidental, maybe even a way to cover the free drinks at the blackjack table. But add those resort fees to the Saguaro's rate -- and on top of city, county and occupancy taxes -- and you're submitting an expense report in which the incidentals make up almost a quarter of the total hotel bill.
Additionally, while revenue-generating amenities such as room service can actually be a money-loser for a hotel, NYU's Hanson says such resort fees can generate margins of between 80% and 90%.
Which means that there's something else included in those fees: gravy.
Contact Danny King at [email protected] or follow him on Twitter.