Whether to bundle resort fees into room rates or separate them is a source of debate in the hotel industry, but experts agree that transparency and full disclosure are musts.
This topic gains even more exposure as consumer awareness of fees grows and the industry is poised to collect record amounts of fees and surcharges this year.
That debate on resort fees received a new push in July when the Federal Trade Commission responded to a nonprofit group that it isn’t considered deceptive practice if resort fees aren’t bundled into advertised room rates. However, those resort fees still need to be prominently disclosed
So the question for hoteliers then becomes: To bundle or not to bundle?
Toni Repetti, an assistant professor at the University of Nevada, Las Vegas’ William F. Harrah College of Hotel Administration, recently wrote for Hotel News Now about two studies she and her fellow researchers conducted. The first looked at resort-fee practices and their effects on guests at Las Vegas hotels. The other focused on the amounts of resort fees and how they influenced hotel guests.
The first study showed that 41% of the respondents wanted a price that bundled the nightly rate plus the resort fees and included all of the amenities, she said. Only 25% wanted it separated. The remaining 34% said it didn’t matter to them because they would end up paying the same amount no matter what.
When the researchers included the actual dollar amounts in the second survey, the percentage of respondents in favor of bundling jumped from 41% to 67%. However, 88% of respondents said the fee itself wouldn’t make them switch to another hotel without one.
“When you separate it out, they think they’re paying for something they’re not using,” Repetti said. “If they’re not using the fitness center or the water in the room, they feel they’re not getting a value. They feel like they’re losing out on something.”
When hoteliers bundle the fee with the rate, guests have the perception that they’re paying for their stay and all of these amenities are included. The cost to the consumer is the same, only the perception changes, she said.
Not to bundle
While bundling has its advantages, Bjorn Hanson, a clinical professor at New York University’s Preston Robert Tisch Center for Hospitality and Tourism who has researched resort fees since 1997, said he’s not sure that adding resort fees to room rates would be the best practice.
“When we look at how guests make a decision, often room rate drives the decision,” he said.
Read full article at: Hotel News Now