Will Marriott settlement lead to end of resort fees?

With the Pennsylvania attorney general’s office reaching a settlement last week with Marriott International to better disclose resort fees in published rates on its web sites, will these fees soon be folded into rates and/or go away as not to give a big competitive advantage to OTAs?

The settlement came as a result of a lawsuit that questioned whether or not Marriott was in violation of consumer-protection laws, and only applies to Marriott’s booking channels and its properties in the United States. Marriott now has nine months to implement the change nationwide.

As a result of this news, OTAs have an opportunity to gain share as they can still show rates without the fees and continue to deceive consumers. It is early days as this settlement was just reached and Marriott just made a statement about the ruling. But it will, no doubt, change the game with fees that have been a great bottom line savior for owners.

The settlement states that Marriott has agreed to be “upfront and transparent in the disclosure of mandatory fees, including resort fees, as part of the total price of a hotel stay – allowing consumers to be able to compare total price costs for hotels and find the one that is the best fit for them.”

Marriott must prominently disclose the complete rate on the first page of the booking process. In return, Marriott is not admitting to any legal violations.

The ruling is likely to sway other major hotel brands to reconsider their policies and may eventually result in the fees going away altogether. Hoteliers could also ask guests to pay extra fees for services while on property, which has been a highly debated topic as of late. Some hoteliers argue many hotel services should be offered a la carte, similar to airline’s practices.

One veteran hotel executive told HOTELS on Monday, “I do think others will follow as Marriott has been setting the standards on quite a few things. More of the independents may take longer, but I think our industry is seeing an evolution right now on many fronts, and this is one of them… It’s hard to say what the impact may be, but I think it would start with how rates will be advertised on websites, and may show or identify at that point a ‘resort fee’ in addition to the room rate… I think it would be hard for hoteliers to roll these fees into their published rates because it would push the published rate higher than perhaps a competitor that does not have the resort fee, which at that point would create a large enough rate disparity to cause a disadvantage for that hotel that is trying to collect on the resort fee. I think the whole process will evolve into what we see with the short-term rental rate structures of the listed rate, the resort fee, a cleaning fee (if applicable) and so forth.”

In an email exchange on Monday, Marriott was not ready to elaborate on the impact of the decision, but in a statement it said: Marriott International has long been committed to making sure that any resort/destination fees charged by hotels in the U.S. are separately and clearly stated. For many years, consistent with guidance from the Federal Trade Commission, we have clearly disclosed such fees on our channels throughout the booking process, with disclosures on multiple pages before the customer elects to book a room. Further, we have controls in place to ensure that hotels in our system that include a resort/destination fee adhere to strict criteria, which includes a requirement to provide amenities that have a value exceeding the amount of the resort/destination fee. Our agreement with the State of Pennsylvania further enhances the way resort/destination fees are fully disclosed on our U.S. channels and we will be working over the next several months to update the room rate display in accordance with that agreement.