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Are ?entertainment fees? and ?resort fees? just a way for hotels to jack up their rates?

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June 17, 2013

Are ?entertainment fees? and ?resort fees? just a way for hotels to jack up their rates?

Golden Nugget in downtown Las Vegas on Sunday, Jan. 20, 2013 by Steve MarcusGolden Nugget officials say there?s a valid reason behind their decision to add a $5 nightly fee to customers’ bills. The casino-resort is calling the charge a “Fremont Street Experience fee.”

Vice President of Marketing Amy Chasey said it is necessary to offset growing operational costs.

?It?s just like running an average household,? Chasey said. ?Rates go up. Electricity goes up. Housekeeping goes up.?

But Chasey contends the Fremont Experience fee is not a ?resort fee.?

Because there are significant costs associated with maintaining the Fremont Street Experience, Chasey said, it seemed like a better idea to roll out a nominal $5 fee attached to the entertainment outside the casino-resort rather than a $25 resort fee or higher room rates.

?[The Golden Nugget] pays this significant fee for the experience,? Chasey said. ?Rather than raising our rates, we went this $5 fee.?

But others in the industry say calling the charge an entertainment fee is disingenuous. They say the?Golden Nugget?and other resorts that add ancillary fees are only disguising higher room rates.

Many casinos try to keep their rates low to appeal to travelers who book rooms on sites such as?Expedia?and?Priceline. Most users search for rooms using the sites’ lowest-to-highest-price sorting feature.

Keeping room rates low, then adding extra fees that don’t show up until a booking is almost complete, allows hotels to appear higher on the sorted list, making them more likely to be selected by travelers.

A downtown casino operator who wished to remain anonymous said the difference between landing on the first page of the search results and the second can mean thousands of dollars.

Resort fees are the hotels’ out, said Bill Maloney, founder of FeeZing, a travel website that warns travelers about hidden fees.

?Resort fees are a way for a hotelier to get control of their assets,? Maloney said. ?It?s a way for them to have deceptive low rates.?

Resort fees rarely are rolled into advertised prices on travel booking websites. More often, they are presented in the bill customers receive at the resort. Most travel websites don’t disclose the fees until a traveler clicks ?Book.?

The Federal Trade Commission calls the process ?drip pricing,? which the agency describes as a ?technique in which firms advertise only part of a product?s price and reveal other charges later as the customer goes through the buying process.?

Many travel experts are critical of how resorts handle fees.

?It?s possible to make money by lying, but it?s wrong,? said Christopher Elliott, a consumer advocate with National Geographic Traveler. ?They?re lying.?

The Golden Nugget?s new fee has many travelers grumbling.

Several disgruntled customers hopped onto the casino?s Facebook page shortly after?to express their disappointment after news broke of the fee.

?Thanks for kicking your guests in the groin with a bogus mandatory fee,? Sam Novak wrote. ?This is, by and far, the opening of Pandora’s Box for downtown.?

Six ?likes? supported the rant.

Click here to read more.

Source: Ed Komenda (2013). Are ?entertainment fees? and ?resort fees? just a way for hotels to jack up their rates?, Las Vegas Sun? published Jun 14, 2013. Viewed Jun 17, 2013.

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