Resort Fees – Booking.com starts charging commission

Just like airlines introduced ‘fuel surcharges’, some hotels – particularly in resort locations in the USA have started charging a ‘Resort Fee’ on top of their nightly rate.

Why Resort Fees?

Originally these were charges for additional services at high end resort – things like shuttle services use of a pool and valet services. But now they are just slapped on for services that used to just be covered by the room rate.

Well, like ‘fuel surcharges’ it’s a way of doing three things:

• artificially lowering the per-night price – resort fees are effectively mandatory, although the language of them sometimes implies that they are discretionary
• non-commissionable on online sites – up until now, the ‘charge’ has not been part of the price on which online booking platforms get a commission
• making more money – resort fees are just another way of making money for the hotel

Booking.com – says ‘resort fees’ are gaming the system

Resort fees have outraged the public, and they are outraging the online booking industry, where they artificially reduce the commission the booking sites earn.

Worse still, on some sites, these fees are only disclosed when a booking is nearly complete – or is complete, with the resort fee having to be paid at the hotel.

Well – not any more! – says Booking.com

Skift quotes Booking Holdings spokeswomen Leslie Cafferty:

“As an extension of our overarching aim to provide our customers with transparent information about the total price they will need to pay at a property when they make a booking and to create a level playing field for all of our accommodation partners, we are updating our process when it comes to charging commission on mandatory extra fees that customers are asked to pay at the property.”

Leslie Cafferty, Bookings Holdings

Will the hotels hit back?

What will happen next is the big question. Will the affected hotels roll their resort fees back into their prices? Will they withdraw their listings from Booking.com sites? (Agoda, Kayak, Momondo, Venga and HotelsCombined are just some of the other sites in the group). Will other major sites follow suit – like the Expedia Group? (hotels.com, Orbitz, Travelocity, Trivago, amongst many others).

2PAXfly Take Out

I think this issue will reflect the history of ‘fuel surcharges’ in the airline industry. There will be some argy-bargy about taking a commission on the resort fees. Hotel groups will threaten hotel booking sites and aggregators initially. Then everyone will come to an agreement, and resort fees will disappear from the major booking sites while remaining on some other site (possibly on the hotels’ own sites, and then they will be uncompetitive, and finally resort charges will disappear.

What do you think?