Casino steals page from airline playbook, swaps out resort fee for phone “processing fee”

By | April 5th, 2010

Back in January, I noted with amusement that Harrah’s had issued a press release saying it does not “impose mandatory resort fees attached to a room reservation.”

At the time, I wondered why Harrah’s had phrased its announcement in exactly that way. Why not just say, “We’ve eliminated resort fees?” Also, it remained unclear why a large casino resort would turn down money from its guests that, at least according to the other casinos in town, they were more than willing to pay.

Well, yesterday I got the troubling answer to all of those questions.

It started with an email from reader Ada Sui. She and her husband, Norman, had booked a room by phone at Harrah’s Reno Hotel and Casino.

He was told that there will be a $5 processing fee. We have not heard of this and wonder if it is legal or not. We realize that this is a small amout to bicker about, but just for the record, is this legal?

Airlines have charged extra for reservations made by phone for several years, but I’ve never heard of a hotel doing it. So I called Harrah’s reservations number to find out more about the processing fee.

A representative confirmed that at about the same time Harrah’s announced the chain-wide resort-fee elimination, it quietly added a phone reservation fee of $10 for its Las Vegas and Tahoe resorts and $5 for its Reno property.

“We decided to do that instead of a resort fee,” he told me.

How interesting.

If you do the math on that, it’s clear Harrah’s is still losing money. If it could charge a $10-a-day resort fee, it would make far more than a one-time, $10 phone reservation fee.

But I’m worried that any hotel is charging for a phone reservation. Guests like the Suis, who make their reservations by phone, now must pay a higher room rate for the “convenience” of calling the hotel. What’s next, charging people for the “convenience” of paying with a credit card? (Don’t laugh, several airlines already to it.)

Is this a future hotel revenue stream? Something tells me it could be.