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Pencil: Vegas Resort Fees and Retail Pricing

By Chuckmonster on Tuesday, 3rd August 2010 3:16am
  » filed under Las Vegas  comments: 8

   

Resort fees. A subject which divides tourists almost as much as top brass at competing casinos. On one side are those who argue that if good stuff comes with the fees, then they'll be glad to them. On the other side are the same people who have thrown rocks at Ticketmaster for 15 years of funk-you-up-the-ass convenience fees.

As a self professed resort fee agnostic, I've decided to do a little emotion free research into how resort fees affect how average daily rate (ADR) pricing is displayed on travel retailers (Expedia / Hotels.com / TripAdvisor use the same pricing hub) travel discounters (Priceline) travel aggregators (Kayak.com) and on direct sales from the casinos themselves.

For this study, I've culled ADR rates for five day trip to coincide with the Vegas Podcast-A-Palooza, from October 28th - November 2nd. I've pulled rates from Expedia.com, Priceline.com, Kayak.com and direct sales from resort websites. Resorts chosen are four from MGM Resorts International (Luxor, Monte Carlo, Mandalay Bay, ARIA) three from Harrah's Entertainment (Harrah's, Flamingo and Planet Hollywood), The Venetian, Wynn Las Vegas and Encore, and the brand renewed kid on the block, The Tropicana.

Resort Fees

Of the resorts we've studied, only six of them charge a resort fee: Luxor ($13), Monte Carlo ($15), Mandalay Bay ($15), Wynn Las Vegas ($20, for resort rooms), Encore ($20, for resort rooms) and Tropicana ($10.) The Actual Cost metric is derived from adding the daily Resort Fee to the average daily rate culled from resort website Direct sales. This is the "Actual Cost" of one nights room at a given hotel.

Resort Fees

The surprises start when we stacking ADRs of Actual Cost against quoted daily rates from Expedia, Kayak and Priceline. In one case - Aria - the Actual Cost and travel retail cost is virtually identical. In other cases, the most extreme being Wynn Las Vegas and Encore, the Actual Cost skyrockets over travel retail cost, leading us to recommend to all VT readers to avoid booking any rooms at Wynn Las Vegas or Encore directly through their websites. It is also worth noting that Wynn Las Vegas and Encore are not listed on Priceline.com, which, if I recall correctly, is part of an agreement the resort has with the discount retailer. MGM Resorts properties - Luxor, Monte Carlo and Mandalay Bay - also charge a premium on direct sales, which is surprising considering their heavily promoted "Best Rates Guarantee." In addition to charging approximately 5% more for direct bookings, those three resorts tack on resort fees as well, raising the "almost comparable" price point beyond an acceptable range.

One of the most shocking findings of this study is that two of Harrah's Entertainments properties, their flagship and the fabulous Flamingo, both charge a ~10% premium on direct bookings compared to travel retail prices. This price jump is nearly equivalent to a paying a $10 resort fee, we highly suggest that anyone booking direct through any Harrah's website to do their comparison shopping and put Harrah's "Best Rates Guarantee" to the test.

Finally, the Tropicana seems to be in a bit of pricing flux. Unless you capture one of the stellar packages they have been advertising or win one of our contests, your best best is to try and search for legacy pricing on travel retailer websites. With the closure of the Garden Rooms and renovations of the Island Tower, the days of the $59 - $79 / night rooms at the Tropicana are certainly numbered. Grab those deals while you can.

Even by the numbers, Vegas Resort Fees, don't really make a helluva lot of sense. When armed with hard comparison data, a firm hotel budget and the knowledge of what resort fee offerings you would probably pay for anyways (in my case it is internet access) there is no reason why you can cut through the nonsense to find the sweet spot of Vegas hotel pricing and start your trip off with a coupla extra bucks in your pocket.



Tagged: resort fees   pricing   harrah's   wynn   mgm   tropicana   





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Comments & Discussion:

That's a lot of number crunching Chuck....The bottom line (that the man doesn't tell us) is the new monster revenue stream they create. Working in an industry that charges for a product that used to be free (airline bag fees) The figures that are shared with us in regards to the revenue being brought in is crazy. The airline I work for brought in an additional 15mil in bag fees...alone... last year, and we only charged for half the year. You think along the same lines as an MGM property charging 15 dollars on top of there base rate..and boom huge chunka change. Yea it sucks for the consumer but its a new revenue stream that business are finding harder and harder to resist.

I personally don't mind about Resort Fees, Bag Fees..etc as long as there is something backing it up. In a previous life we had to charge a new facilty charge...with no new facilty in sight...thats a hard one to explain. But if I get WiFi, a drink, and access to t he fitness center I don't mind Even if I don't use it, I don't mind...because its my fault I didn't use it not the resort who is charging me...now thats just me..and I am in the minority on this one. Then the Inception question at hand is..would I have used it w/o the fee? Probably not but I got charged so I don't mind it. But again if I am getting charged for it I am using it, so no complaints from me...there is no way around it so why bitch at the res agent or check in person.

I see the big difference between Resort Fees and the fees airlines charge is that the airlines at least give you some choice: if you want to check a bag, THEN you pay the fee. I've never seen a Resort Fee be optional -- if it is, then fine. That gives me an analogous situation to the airlines. But a non-optional fee is unethical, in my opinion.

Are we sure of the accuracy of all those "actual cost" metrics? I thought I've seen disclaimers from time-to-time excluding Resort Fees, particularly since they change so frequently.

The biggest difference is when you compare a discounted mid-week rate (e.g. Luxor at $49) and then add in the resort fee. You can end up paying 50% more just due to the resort fee.

Still not a fan of resort fees. Think they are unnecessary, especially when you are already paying a pretty high price for most of the resort fee charging hotels.

I agree with TC in that the idea for the resort fee is still the same as charging for baggage. It's the mentality of, "what can we charge people for that they're already using and not make our price seem higher?"

When you price a trip, rarely do you consider the checked bag fee or the resort fee. This is a very smart business move. In fact, if it weren't for Southwest constantly reminding people of bag fees, it would be an even better move, because everyone would be okay with paying them and accept it as an inevitability.

The real question is, how do they continue to increase revenue streams when the resort fee becomes an established part of the business? It has to be something similar, where when you book it on Expedia it's a footnote, not a direct cost included in the price. Are we soon going to be reading articles about chamber maid fees or cable TV charges?

the question is:
do the hotels still charge you the resort fee upon checkout, even if you've paid for the hotel on one of the discount sites?

" if it weren't for Southwest constantly reminding people of bag fees, it would be an even better move, because everyone would be okay with paying them and accept it as an inevitability. "
- no, people would still not be okay with them - they will bitch and complain, but just accept the reality of it and pay them anyway, same as resort fees. there's usually nothing you can do about either one once you're at the airport, or paying for your room. the average person doesn't know about the resort fees until they get the bill.

The Venetian charges resort fees as well.

I'm a little confused by the second graph as well. Just to check I pumped the Wynn numbers through Wynn's website and Expedia.

Expedia's website quoted $182 a night for those dates. However this rate doesn't include the taxes and fees line item that Expedia adds when you go to book of $22.54/night. In addition to those fees there's a note that the hotel charges an extra $20/day in resort fees on top of those fees. This means the package total was $1026.22 without resort fees. Further I think Expedia was using the EARLYBOOKING code that's out there as that reservation was non-refundable.

Using the EARLYBOOKING code through Wynn's website yielded an ADR of $189.20 and a package total of $946 without resort fees.

So it looks like in the specific case of Expedia vs Wynn's website, it's important to note if the ADR shown prominiently on Expedia includes taxes and fees and if those taxes and fees actually include the resort fee or not. Also important is to know if Expedia is using a promo code.

I consider the baggage fees and resort fees when I travel. With the baggage fees going up along with the airfare, my cost for flying to Vegas from NJ on Continental has gone from $310 last May, September, and January to my current cost of $472. Add in the $100 for leaving my car at the airport, tack on some resort fees for products and services I'll never, ever use, factor in the overpriced drinks and food, and my quarterly trip to Vegas has now turned to once a year in Vegas, once a year in Hawaii. And Hawaii is the cheaper trip.



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