Marriott tosses on yet another fee to rooms at select Los Angeles hotels

Here we go again.

Just when you thought drip pricing might legally have to dissipate, a few Marriott hotels in Southern California are out with yet another fee to tack onto a nightly rate.

On the one hand, the fee appears limited to just a couple of hotels near Los Angeles International Airport (LAX). But this latest move could be a sign of things to come for many hotels within Los Angeles city limits. After all, resort fees started small before scaling up to more hotels nationally.

Both the Los Angeles Airport Marriott and the Renaissance Los Angeles Airport Hotel are now charging a daily "Hotel Worker Protection Ordinance Costs Surcharge" on top of nightly rates. The fees range from $8.70 at the Renaissance to $10.72 at the Marriott, according to an initial report from One Mile at a Time and later verified by TPG.

The fee is believed to be in response to an ordinance Los Angeles Mayor Eric Garcetti signed into law last summer that mandated hotel owners provide employees with personal panic button devices as a safety precaution while at work. The city law also stipulated hotels must pay workers a premium wage for "heavy workloads" (a workday limit related to square footage cleaned) in hotels with more than 45 rooms.

One could take this as a warning sign of what might eventually show up on your hotel bill in response to increased labor regulations across various markets. Unite Here, one of the largest hotel labor unions in the U.S. and Canada, was a major supporter of the new law and is active in many major North American cities.

It was not immediately clear if Marriott International was encouraging hotel owners to charge the new fee in response to the ordinance or if any guidelines came from the California Hotel & Lodging Association, the hotel industry's leading lobbyist group in the state.

The CHLA — which worked with groups like the Hotel Association of Los Angeles and the American Hotel & Lodging Association to lobby against the passage of the ordinance this summer — declined to comment and directed any request for comment back to Marriott.

"While this new law will only apply to City of Los Angeles hotels, the law may set precedent and pave the way for similar laws in other cities," the Hotel Association of Los Angeles said in a release this summer about the new hotel labor ordinance prior to its passage.

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Marriott did not respond to TPG's request for comment in time for publication.

Small-scale surcharge (for now)

TPG did not see any other nearby LAX hotels operating under various Marriott branding levying the surcharge. High-profile hotels in the Los Angeles area, like The Ritz-Carlton, Los Angeles, the JW Marriott Los Angeles L.A. Live and the West Hollywood Edition hotels, weren't charging the new fee, but those hotels were levying daily destination fees — another term for resort fees typically charged by hotels in major cities.

The worker surcharge is the latest in industry trends during the pandemic of passing on various costs to hotel guests.

Marriott just last week reported daily rates in the U.S. and Canada were 15% above 2019 levels, and profit margins at the property level for managed hotels were 2% higher than before the pandemic "despite meaningful wage and benefit inflation," according to Leeny Oberg, Marriott's chief financial officer.

"At the hotel level, we remain focused on containing operating costs for our owners and franchisees while also delivering superior service to our guests," she added on a company investor call.

It might seem like a bit of a head-scratcher that Marriott would let hotel owners lean further into the chided practice of "drip pricing," where a listed room rate gets higher by the time a guest actually books after factoring in various service charges. After all, Marriott only settled with the Pennsylvania attorney general's office late last year about resort fees.

But settling didn't mean doing away with the practice. Instead, the company agreed to prominently place the fees on the first page of a booking site.

Similar to how the company now displays resort fees in a blue box over the reservations page, the two LAX hotels were noting the worker protection surcharges in the same vein.

Bottom line

Transparency is the accommodation sector buzzword this month, as Airbnb late last week announced it would similarly incorporate all fees associated with a booking on the initial search page and listing rather than wait and provide the grand total at the time of booking.

"I think the north star for us on this matter is transparency," Airbnb CEO Brian Chesky said on an investor call.

In the case of the Marriott hotels near LAX, guests can either accept the new fee or — for now — stay at just about any other Marriott-affiliated hotel in the region and avoid yet another daily charge on their final bill.