Resort Fees Growing In Las Vegas And Annoying Customers, But Experts Put Costs in Perspective

Posted on: September 18, 2019, 08:07h. 

Last updated on: September 19, 2019, 03:45h.

Ed Silverstein @casinoorgedsilv Read More
Expertise: Legal, Tribal Gaming.

Mounting Resort fees and other extra hospitality sector charges are increasingly common in many US locations, including Las Vegas. But experts advise hotels and casinos need to be upfront about these add-on costs, so visitors are not angry or surprised.

Nevada’s Park MGM is charging extra fees for drinks, much to the displeasure of many guests. (Image: Wikipedia)

Already, venues such as those on or near the Las Vegas Strip are adding expanding service fees to guests’ bills. That leaves many customers irritated upon seeing fee totals when departing.

“Undoubtedly, these costs have risen in the Las Vegas market over the past 10 years,” Anthony Cabot, Distinguished Fellow in Gaming Law at UNLV’s law school, told Casino.org. “Still, the Las Vegas market is quite competitive, and both US and foreign guests can still find rooms within a broad range of prices that accommodate most vacation budgets.”

Many Las Vegas properties now charge visitors for parking, as well as add a resort fee to guests’ bills. Resort charges are now as high as $45 a day, and more fees are possible.

For instance, Park MGM charges a service fee for drinks, according to a report from Casino.org. That led to outrage from many readers.

The question … for value seekers, is whether the resort experience in their price range in Las Vegas is better than a similar experience elsewhere. Despite the price increases, I believe that this is still the case,” Cabot said.

He also confirmed that resort and other fees have become “commonplace” in the US resort business. “My recent stays in both New York City and Los Angeles had additional charges for resort fees and parking fees,” adding that an upcoming trip to Hawaii also carried fees.

“Las Vegas is becoming more like Hawaii than other gaming hubs,” Cabot observed. He explained that “a large majority of its revenue is coming from non-gambling activities. Las Vegas no longer needs to compete solely by driving traffic to its casinos and discounting every other resort amenity.”

Cabot said it is important to properly disclose to guests these fees. Then, the guest “will make decisions as to lodging based on the total cost of the resort experience,” he said.

“As a result, the inclusion of resort fees does not necessarily disadvantage Las Vegas versus other destination resorts,” he said. “What may be frustrating to visitors, however, is that they need to be aware of all the charges and calculate the total costs themselves.”

As far as the risk of litigation, “resort fees, per se, are not problematic,” Cabot said. An issue can arise if the resort is deceptive in its method of disclosing the fees, he said.

For example, a resort should probably provide a consumer “adequate notice that in addition to the charges for the room itself, that it imposes additional mandatory fees such as resort or housekeeping fees that have historically been included in the room price,” Cabot said.

Add-on charges are the subject of two lawsuits filed by the Attorneys General for the District of Columbia and Nebraska. The complaints — against the Marriott and Hilton chains — allege online retailers advertise one price and then incrementally increase the cost through mandatory surcharges.

Hotels Need to Understand Consumers

Jaewook Kim, an assistant professor at the University of Houston’s Conrad N. Hilton College of Hotel and Restaurant Management, says academic research on resort fees shows these charges should be understood in “line with customer expectation and preference.”

Overall, venue management, he explained to Casino.org, should consider guest satisfaction levels. “If [a] company delivers better quality than guests are expecting …, guests will be satisfied with the service/product,” he said. “If [a] hotel fails to meet the expectations of [a] guest, [the] guest will be dissatisfied.”

Guests may “prefer disservice and no resort fee and [to] pay for amenities based on usage,” Kim said. Also, he says, it may be better “to bundle a service product inclusive of [a] room rate and resort fee with other service fees.”

Additionally, resort casinos can use resort fees “as a marketing tool to recognize and value” first-time guests and repeat customers, Kim said. For example, resort fees could be waived at some properties if guests are loyalty card holders.

Hotels and casinos also need to remember negative or unethical behavior on the part of a venue — such as being deceptive about fees — can lead to guests leaving with a negative perception and attitude, Kim warns.

“Company reputation in the market is not easily restored and relationships with customers are not easily recovered,” Kim added. “Transparency and proper service quality should come together to secure both profitability and long-term relationship with guests.”

Also, casinos are part of the wider entertainment industry in competitive regions like Las Vegas. Integrated casino resorts are relying on non-gambling revenue, as well as money from casinos, Kim explained.

In fact, Kim says properties are getting transformed into entertainment resorts, where they are similar to a Disney-like property. So, charging a substantial entrance fee “could be a right approach, given future industry trends,” Kim said.

This comes as the gambling sector is offering more options, too. That includes such alternatives as sports betting and online gaming, he adds.

Resort Fees Elsewhere

Looking beyond Las Vegas, other US gambling hubs are charging these kinds of fees, Kim confirmed. In Atlantic City, a resort fee is often charged –which can be anywhere from $15 to $23, according to recent estimates. These do not include extra charges from the state of New Jersey.

Biloxi, Mississippi venues also charge a resort fee. These range from $10 to $16.05, Kim said.

But as these fees are added to a guest’s bill for a stay, workers are watching carefully, given that properties claim they need to reduce costs. For instance, Bethany Khan, spokeswoman for the Las Vegas Culinary Workers Union Local 226, told Casino.org “Whether it’s an optional housekeeping service or a fake green program, these plans are designed to cut costs and reduce labor.”

Green programs are those where housekeeping staff will not routinely change sheets or towels in a hotel room daily. Venues officially promote this as a way to be more sensitive to environmental resources.

“The Culinary Union’s goal is to protect worker’s jobs and their safety,” Khan added. “If these programs are introduced, we will deal with these programs appropriately.”