Friday, September 30, 2011

5 Nickel-and-Dime Charges Fueling the $1.8B Hotel Fee Industry

If you recently booked a great deal on an online travel site like Expedia
(NASDAQ: EXPE ) or Priceline (NASDAQ: PCLN ) but checked out with a much higher
price tag than expected, you're not alone. The hotel industry is in the midst
of a record $1.8 billion fleecing of guests through hotel fees . Not content to
gouge you $5 for the Almond Joy in your mini-fridge, hotels have added a slew of
unsavory fees and charges a few not even disclosed until you're halfway out
the door for services widely expected to be included in the basic hotel
experience, and some for services most people never use. So what grubby hotel
fees should you be looking for in the fine print when you get your key card?
Here's five ways hotels are nickeling-and-diming guests: Mandatory Gratuity
Fees My dad taught me to always leave money for the maid, tip anyone who handles
my bag and be generous to those with unglamorous hotel jobs. But the overlords
at Atlantis resort in Paradise Island, Bahamas, apparently have decided the tip
jar should be mandatory. According to Atlantis website , "guests will be
required to pay a mandatory gratuity and utility service fee of (i) up to $22.95
per person per day for Atlantis guests, (ii) up to $17.70 per person per day
depending on unit type for Harborside Resort guests, and (iii) up to $62.95 per
person per day depending on unit type for The Cove or The Reef Atlantis
guests." Sadly, this type of hotel fee is neither isolated nor new: In 2007,
Jim Schulevitz sued Starwood Hotels (NYSE: HOT ), which owned the Phoenician
hotel in Scottsdale, Ariz., that charged him a $4 daily tip for the maid and a
$28 bellhop tip . Utility Service Fees Let's go back to the Atlantis hotel's
"Utility Service Fee." Imagine checking out and seeing the clerk hold out a
hand, saying, "Hey, bub. Water ain't free." Of course, water is a cost.
But you don't see your restaurant bill itemized for gas in the oven or
electricity for the mood lighting. Airlines have made a habit out of
nickel-and-diming extras. But a guest might have a slightly easier time
digesting "utility" bills from a fleabag motel instead of a posh resort like
Atlantis, where you're shelling out a minimum of $249 to $889 per night,
depending on what building you're staying in. Resort Fee If a resort fee went
toward paying for things you wouldn't get in your basic hotel, it could be
justified. But MGM Resorts International (NYSE: MGM ) charges a $20 resort fee
at the MGM Grand in Las Vegas that includes business center access, in-room
Internet access, a newspaper, local and toll-free phone calls. Not exactly an
exclusive poolside patio. And it's not to make up in any shortcomings in the
room cost. That fee applies for even the bargain-basement one-night, two-adult
stay in the Deluxe Grand Tower King Room for $220.

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