For months, U.S. President Joe Biden has pledged to fight against so-called “junk fees,” or hidden costs related to things like airline travel, lodging and credit cards, which cost Americans large sums of money each year.
He followed up on this promise during his State of the Union address on February 7 by announcing the proposal of the Junk Fee Prevention Act, a piece of legislation designed to ban such hidden fees and ease the burden of inflation for U.S. consumers—the president vowed that if passed, the measure would help families save “thousands” per year.
With that in mind, Democratic lawmakers from Nevada who have traditionally been aligned with Biden’s agenda, including Rep. Dina Titus, Senator Jacky Rosen and Senator Catherine Cortez-Masto, have pushed back slightly, arguing that the resort fees charged by Nevada properties are not in fact junk.
Biden said during his address that he pledges to “ban surprise resort fees that hotels charge on your bill,” and added that most of the properties charging these fees “aren’t even resorts.”
In a statement, Titus said gently, “I’m sure the president knows, Las Vegas resorts really are resorts. I commend and share President Biden’s view that customers need to be protected from exorbitant ‘junk fees,’ and I applaud efforts by the FTC and hotel operators to ensure transparency in pricing.”
Similarly, Cortez Masto said in her own statement that she will “make sure this administration’s proposals stay focused on eliminating surprise fees,” but not by “punishing our world-class hotels and casinos for charges they already disclose up front.”
A spokesperson for Rosen said that the senator supports “strong consumer protections against problematic hidden junk fees while also understanding that many resorts do rely on fair and transparent charges.”
Resort fees, as defined by the Federal Trade Commission (FTC), are mandatory charges levied on a per-room, per-night basis, to help compensate for high-end amenities. Per a study conducted by New York University, U.S. properties collected a total of $2.9 billion in such fees in 2018 alone.
With regards to Las Vegas, property owners would simply raise other rates to compensate for the lost revenue should the legislation pass, according to UNLV hospitality professor Anthony Lucas.
Lucas told the Las Vegas Sun that operators are “not very likely to take a 3 to 10 percent haircut for nothing,” asserting that resort fees “are legitimate costs that they’re going to have to recoup one way or another.”
As of now, however, there is not much concern that resort fees will be included in the ban, due to the administration’s own definition of “junk,” that being any fees that provide no value to customers.
Bill Miller, president and CEO of the American Gaming Association (AGA), the leading trade association in the industry, recently penned a letter to FTC Secretary April Tabor that outlined this distinction.
Miller wrote that offerings such as high-speed internet, shuttle services and nightclub entries are “representative of features not usually provided with a simple guest room,” which is why the added fees are justified.
“These additional services and amenities make for an elevated travel experience, with an attention to detail valued by guests,” said Miller. “Resort fees are a signal to our customers that they will get more than just a well-appointed room. Because these extra amenities and services come at a cost to the resort, patrons are charged a resort fee — they are inherently valuable and therefore should not be considered “junk.”
He also contended that above all, the fees are 100 percent transparent and disclosed early on in the booking process.
The issue is inherently more important to Las Vegas than most other cities due to the disproportionate amount of high-end Strip resorts; in most markets, only a very small percentage of properties feature such fees.
In fact, according to a statement from the American Hotel & Lodging Association provided to the Sun, 94 percent of all hotels in the U.S. don’t even charge resort fees—those that do, however, “clearly and prominently display them for guests during the booking process, in accordance to FTC guidance.”
