With Booking.com making the controversial move of charging commissions on hotel resort fees for the first time this week, rival Expedia Group isn’t ruling out matching the new stance.
“We’re observing, we’re listening,” said Cyril Ranque, Expedia Group’s president of lodging services, who added “we’re trying to get as much information as we can.”
He said Expedia has not changed anything about its commission collection policies, and pointed out, “we are hearing, despair, high concerns from our hotel partners. We’re trying to get as much information as we can.”
Ranque isn’t a fan of resort fees in part because Expedia loses out on commissions because it only collects them on the room rate, and also the resort fees are misleading to consumers.
For example, a deluxe room with two queen beds at the Treasure Island Hotel and Casino in Las Vegas for a June 11 stay goes for a nightly rate of $84, but it’s only when consumers click through to a checkout page on Expedia.com that they see the fine print that there is an additional $42 daily resort fee.
Expedia collects a hotel commission on the $84 nightly rate while Booking.com’s new policy has it collecting commission on the combined $126 rate plus resort fee.
In addition to losing out on the larger commission, Ranque said he doesn’t like resort fees because of “the negative customer experience” in that travelers think they are paying a certain rate when they see the lead-in price, but actually they are often shelling out a lot more.
“They think they had a price,” he said. “They book it and then all of a sudden they get hit by a series of fees that the customer has no choice in paying. So that’s why when we really think about the health of the travel agency business, it’s not really good to not tell the customers in a clear way.”
Vijay Dandapani, CEO of the Hotel Association of New York City, condemned Booking.com’s new policy, and sees value in resort fees for hotel guests.
“Resort and urban fees provide real tangible value to the guest and there is plenty of empirical evidence that a majority of guests have no problem with it, and appreciate the value offered,” Dandapani said. “Booking’s adding a commission to that is akin to tacking on a charge on to a range of other products and services guests consume at a hotel after checking in, and will only increase the cost to the consumer while unfairly penalizing the largest customer base: hotels.”
The U.S. Federal Trade Commission in 2012 warned hotels that they should include mandatory fees in their advertised rates, but the practice of charging these gotcha fees to guests seems only to have grown in the interim.
Skift interviewed Ranque on the sidelines of the NYU Hospitality Conference in Manhattan earlier this week. He addressed resort fees, changing vacation rental business models, Google’s alleged disadvantage, and Expedia’s negotiating stalemate with United Airlines.
