What is the destination fee, and why are more hotels charging it

My hotel bill from a three night trip to NYC included 21 charges.

Nine of these were for a “destination fee”.

There were three daily fees of about $35 each – even though my third night was supposed to be “free” – plus separate sales and occupancy taxes on each fee.

And that was for just one of our rooms – we had booked 2 rooms. Overall, the fee was $240.

I’ve read about “junk fees” in the hotel industry – how they’re often coined by terms like “resort” or “destination” or even “hospitality” fees, and they’re on the rise (especially in North America) and they even get a mention in it. President Joe Biden’s State of the Union address this year.

But I also read that hotel staff will waive it, when pressured. However, I had no luck at the end of my stay at Thompson Central Park New York, a Hyatt. The front desk staff insisted on paying the fee.

In a written response to CNBC, Thompson Central Park manager Munir Salem said, “Like many hotels in the area, Thompson Central Park includes a daily destination fee to provide guests with amenities, activities, and other benefits that we think guests will enjoy.”

the Hotel website It says that the “destination fee” provides amenities such as:

• Premium internet access
• Access to the fitness center
• Business concierge services
• Newspapers upon request
• One bottle of water per guest upon check-in

These are all things I assumed would come with my reservation, especially since admission rates regularly exceed $500 a night.

there is more. Fee also provides discounts: 1 hour free bike rental (with 1 hour paid), 6% discount New York corridor Sightseeing, 8% off a bus tour, and “exclusive access to 20% off” zoo tickets – all nice things, but nothing I would want or use.

In the competitive luxury hospitality industry — where operators strive for flawless accommodations and great online reviews — charging hotels risk leaving guests feeling scammed before they step out of the house.

But the reason is not surprising.

“It’s very profitable,” Raafat Ali, CEO and founder of travel media company Skift, told CNBC. Estimates from the Federal Trade Commission show that consumers paid about $2 billion in hotel fees before the pandemic, and The mandatory fee has increased since then.

Ali said hotels hope the mandatory fee will eventually be normalized, similar to how baggage fees are now an acceptable cost when traveling. But he said that would never happen.

“That was the argument they made all along, which was: If I’m not checking in, why should I be paying for that as part of the package?” He said. “In hotels, that doesn’t work because you…you don’t unpack anything, you just add this—and there’s no way to opt out.”

On August 1 on Skift’s website, Ali wrote An open letter to the travel industry With one message: “You won’t win the ‘spam fee’ battle.”

The reason, he said, is that even in the partisan world, everyone hates these cartoons.

last March, Unsolicited Cartoons Prevention Act It was introduced in the US Senate to eliminate “excess, hidden, and unnecessary charges” and to require that total costs be clearly displayed “when the price is first shown to the consumer.”

In July, a bipartisan bill introduced in the US Senate specifically targeted fees in the hotel industry. project of law hotel fee transparency act, Hotels are prohibited from advertising rates without a mandatory fee.

Whether or not the bills are approved, Ali said, he believes they put general pressure on companies to act — and, he added, how the Biden administration has targeted airlines that force families to sit together. United, America and Frontier soon changed their policies.

On August 10, it was The Texas Attorney General has filed a lawsuit against Booking Holdings – which operates popular booking sites such as Booking.com, Priceline, Agoda and Kayak – for deceptive business practices, targeting companies that advertise a single price and incur mandatory fees later in the purchase process.

the suit He addresses this practice, known as drip pricing, describing it as an illegal “bait-and-switch tactic” that drives more consumers to make purchases either because they don’t notice the new charges or because they reluctantly accept the charges on the final booking page – Out of reluctance to start the process over.

The state of Pennsylvania filed a similar complaint against Marriott International in April 2023, the hotel chain She agreed to pay $225,000 to Pennsylvania for failure to comply with what was agreed upon settlement termswhich requires that Marriott clearly announce room rates and mandatory fees.

Salem of Thompson Central Park told CNBC that the Direct booking channels fully disclose room rates and any guest charges throughout the booking process.

I checked and indeed the hotel website includes the $35 fee in the total cost. Searches on Booking.com and Expedia showed the same thing. Maybe I should have expected the fee after all?

But the problem is that I didn’t book online; I booked over the phone (my family needs interconnecting rooms It is a problem in itself). In addition, when we checked in, the hotel could not locate our reservation, which resulted in us having to negotiate a new reservation on the spot. During these discussions, we talked a lot about prices, but the destination fee never came up.

In a statement in support of the Hotel Fee Transparency Act, American Hotel and Restaurant Association President and CEO Chip Rogers said the bill would “create a single standard for viewing mandatory fees.” But even with transparent pricing, cases like mine can slip.

I’m left wondering why hotels don’t simply tie this fee to the room rate. After all, the same guest who charges $300 a night might refuse to pay $250 for a room and $50 for a “hospitality service fee.”

Several days into our stay, my husband and I – bent as hell on principle at this point – called the hotel to dispute the fee. The representative said he would file charges if we were members of the Hyatt loyalty program. We are not.

However due to our failure to check in we were told we were good candidates for the fee waiver.

We hung up and waited – that was about two months ago.

After weeks of silence, I finally called my credit card company to dispute the charges, as recommended by the articles. like thiswritten by consumer advocate Christopher Elliott (who received the same baffling email as me, describing a destination fee of “only $30” at a California hotel “guests will really love”).

Within minutes my credit card company removed the charge. An email quickly confirmed this, saying, “Your dispute has been resolved.”

But victory was not the feeling I had. Don’t get me wrong – I was glad the fee was avoided. But this was never about money. It’s about the inherent injustice of handing over a hotel bill of several charges you weren’t expecting.