Resort Fee Backlash Hits Las Vegas

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Though the jury is still out on whether higher resort fees will ultimately affect business in Las Vegas, the recent fee hikes by MGM Resorts at its Aria Resort & Casino, Bellagio Hotel and Casino, and Vdara Hotel and Spa are stirring up the conversation.

Rates at the three high-end properties rose on Aug. 1 from $39 to $45 a night. When tax is factored in, the tab totals $51.02 a night, marking a 15 percent increase. The new price matches the matching the fees already in place at Wynn Las Vegas, The Venetian and The Palazzo.

Gaming analysts at research company Telsey Advisory Group have been warning since at least June that fees were impacting visitors’ perception of Las Vegas as an affordable destination, according to the Las Vegas Journal.

Telsey also claims that visitation to Las Vegas has been down the past couple of years partially due to Vegas fazing itself out of being an affordable destination.

The number of visitors traveling to Las Vegas fell from 42.9 million in 2016 to 42.1 million in 2018—a 4-year low.

In a Los Angeles Times story earlier this week, readers were given a platform to comment on the practice of resort fees that sometimes equal or exceed the listed hotel room rate.

One Ohio resident, 69-year-old Nino Bandera, was quoted as saying he’s made close to 100 visits to Las Vegas over the past 50 years to gamble and vacation, but he is skipping Las Vegas this year because of rising Strip fees and higher food prices.

“Enough,” he said of fees. “(It) breaks my heart, but we are going to drive to Tunica and give it a try.”

Meanwhile, Illinois resident Chris Max said resort fees were not significant enough to stop him from visiting Las Vegas for the NCAA Tournament. Max booked his room at Treasure Island, which charges a daily resort fee of $37.

The issue with hidden resort fees has even prompted the website Kill Resort Fees, founded in 2016 by Lauren Wolfe and dedicated to educating travelers about the deceptive and unfair nature of resort fees.

MGM’s other properties are not raising resort fees. Caesars Entertainment also announced in its Q2 2019 Earnings Call transcript, dated Aug. 5, that it would not raise fees at its properties.

Tony Rodio, CEO at Caesars Entertainment, said in the report: “Well, we’re certainly seeing them continue to escalate, and I think one of our competitors just announced an increase as well. I look at that as it’s something that we need to be a little bit cautious about as continuing to escalate those because I think that over time at some point, there’s going to be the straw that breaks the camel’s back. I don’t think we’re there yet, but I want us to be very judicious and, as I said, cautious about taking those rates any further. I mean it’s certainly a revenue stream that’s hard to walk away from and that it’s been accepted to this point, but I think we’re getting pretty high.”

In response to the slowdown in business, earlier this year some Las Vegas resorts actually scaled back their fees or even offered “no-resort-fee” promotions during slow periods, while others hinted they would not raise fees this year, according to the website View from the Wing.

In July, Wynn Las Vegas stopped charging parking fees for overnight guests and day visitors who spend at least $50 at the property, saying the fees were “counter to the personalized service we provide.”

In addition, The Cosmopolitan of Las Vegas canceled parking fees for overnight guests at the start of this year “as an added value,” according to the View from the Wings’ Gary Leff, an expert in the field of miles, points and frequent business travel.

Erwan Mevel of Las Vegas Jaunt, a website that tracks resort fees and helps visitors prepare for their stays in Vegas, commented on the recent rise in resort fees in an interview with Prevue: “There is hope though as we recently saw a turnaround on the subject of parking fees. Parking at the Strip resorts had been free for decades until a couple of years ago when hotels started to implement paid parking. Most properties followed along until there were just a handful of properties with free parking left on the Strip. But the Wynn had a change of heart earlier this year and decided to offer free parking again.”

He posed that, “Maybe the same kind of turnaround could happen for the resort fees in the future. Especially as we see more lawsuits like the one for Hilton and Marriott happening. But let’s not be naive; let’s say a room at the Bellagio costs $120 plus the $45 resort fee. If the Bellagio were to stop charging resort fee we would certainly see that room listed at $165 straight.”

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