The Critical Points: First to go were airline cancellation fees, next should be hotel resort fees
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
In the airline world, fees have become big business. There are checked bag fees, carry-on bag fees, seat assignment fees, fees to print boarding passes, fees to talk to a person and even fees that provide no tangible benefit or service to customers. Think of close-in booking fees, for example, when you may be required to pay $75 or extra miles if you’re within 21 days of departure.
There are also change fees, cancellation fees and the complete forfeiture of certain basic economy tickets that don’t allow changes or refunds.
But this week, we saw the airline industry take a big step in the right direction when United announced it was getting rid of change fees.
For more TPG news delivered each morning to your inbox, sign up for our daily newsletter.
These fees have always been a way for airlines to increase ancillary revenue. In addition to paying any difference in between your existing and new ticket, a change fee seemed particularly punitive.
But COVID-19 has turned the world upside down and diminished business for airlines and hotels to the point that customers need confidence they’ll be able to change plans without being punished, or they simply won’t book a trip at all.
United is the first major airline to make this pro-consumer move of permanently removing change fees — though who knows what the carrier’s policies will look like in five years. Also, Southwest has never had change fees, and would only charge travelers the fare difference.
So, if an airline can get rid of change fees, which serve no practical purpose and doesn’t provide any good or service, a hotel can get rid fo resort fees. Right?
Related: How to avoid resort fees
Imagine you go to the grocery store to buy a single $2.99 box of cereal. At the register, however, you notice $1 was added to your total. It’s listed as a “shopping cart fee” — so you politely tell the manager you didn’t use the shopping cart. The manager says the fee helps offset the cost of providing shopping carts for all customers and, sorry, that’s the policy whether you use a cart or not.
That’s essentially the same as a hotel resort fee: A mandatory charge, often poorly disclosed or not advertised, regardless of whether or not you use the amenities. In reality, it’s a way for hotels to increase cash flow while keeping published rates low. It’s taxed identically to the advertised room rate.
Resort fees, urban fees, season fees, membership fees, urban retreat fees and whatever else the industry will think to call them next need to go. Now. Continuing to charge resort fees at properties with diminished offerings because of COVID-19 is a new low in the resort fee saga.
Many beachfront and Las Vegas properties, for example, are still charging full resort fees, even though amenities such as the pool, kids club and fitness center have reduced hours or have closed altogether.
Because occupancy remains historically low, now is the perfect time for hotels to give travelers transparent rates, without any hidden fees.
Imagine the publicity boost a national hotel chain would receive if it eliminated resort fees in the name of fair and straightforward pricing. They can — and arguably should — raise average daily room rates to compensate for the lost resort fee, especially as demand increases. Ultimately, travelers should be able to clearly see the all-in rate for a hotel stay and determine if the product (and its amenities) are worth the price.
Related: The 10 most outrageous resort fees
Surely, if Las Vegas stopped advertising $30 room rates with a hidden $44 per night resort fee, and instead advertised a $60 per night all-in rate, there would be wins in terms of both booking and publicity.
Hotels will need to be creative to lure back travelers, and eliminating resort fees is a logical, pro-consumer move to show customers you want and value their business. One look at the positive press United received when it did away with change fees should tell you exactly how hungry the public is for the travel industry to adopt more consumer-friendly policies.
Hotels can build trust with guests and sell rooms for a fair rate without tacking on frustrating mandatory fees. In light of the pandemic, things that seemed improbable — or even impossible — six months ago are happening. If an airline like United can shed long-held fees in favor of flexibility and transparency, who’s to say a major hotel chain can’t do the same?
Featured image courtesy of Hoshino Resorts.
Welcome to The Points Guy!
Earn 90,000 bonus miles after you spend $3,000 in purchases on your new Card in your first 3 months. Offer ends 8/3/2022.
With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.
- Limited Time Offer: Earn 90,000 bonus miles after you spend $3,000 in purchases on your new Card in your first 3 months. Offer ends 8/3/2022.
- Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs up to two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
- Earn 3X Miles on Delta purchases and purchases made directly with hotels.
- Earn 2X Miles at restaurants worldwide including takeout and delivery in the U.S., and at U.S. supermarkets.
- Earn 1X Miles on all other eligible purchases.
- Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. Payment of the government imposed taxes and fees of no more than $80 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
- Enjoy your first checked bag free on Delta flights.
- Fee Credit for Global Entry or TSA PreCheck® after you apply through any Authorized Enrollment Provider. If approved for Global Entry, at no additional charge, you will receive access to TSA PreCheck.
- Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
- No Foreign Transaction Fees.
- $250 Annual Fee.
- Terms Apply.
- See Rates & Fees