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

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.

  • http://trips.wrightholdings.com Brad Wright

    You mention the following about :”What’s next, charging people for the “convenience” of paying with a credit card? (Don’t laugh, several airlines already to it.)” while I know of compaines that do this I always understood that passing on the CC % to customers violated a vendors agreement with VISA/MC. Is that not correct??

  • J C

    Ouch. Your right Chris. The hotels are setting us up for the dreaded B.O.H.I.C.A. Thats – Bend Over Here It Comes Again – Just like the airlines, will the fees flow on things that used to be free ? We’ll just have to stay tuned.

  • J C

    Let me add – As I have said in a previous post. The Company is making a business decision. We then have to make a consumer decision. We have a choice. There are plenty of hotels out there, especially in a town like Reno. Unless you have to or really want to stay at a given hotel, You can send a message with your dollars.

  • Kimberly

    I really don’t get this whole resort thing. Personally I think it should fall under “deceptive trade practices”. If they feel they MUST charge this then it needs to be part of the cost of the room not something they add later. It’s like buying a can of peas for .70 cents and then when you get to the register they charge you a dime for the energy, a dime for stock labor, a dime for recycleable can disposal, and a nickle for the coupon. If they want to sell the can of peas for a $1.05 sell it for a $1.05. It’s like they’re using these “resort fees” as a means to “undercut” their competitors making customers THINK they’re getting a good deal when it’s a scam.

  • frostysnowman

    @ Brad – I think you are correct. I’ve read that more than once – retailers, etc, are not supposed to pass on any part of that charge to consumers, no matter how they try to disguise it.

  • MVFlyer

    Per Brad Wright’s post–This isn’t a CC fee pass back, it’s a phone reservation fee (but just try booking the room without a CC number–you won’t get very far, so in a way, you’re right). If Harrah’s starts charging the fee for on-line bookings, then it’s a fee pass back (but there are plenty of ways around this to avoid the CC companies’ wrath).

  • Steve

    I have mixed feelings about this. On the one hand, what Harrah’s is doing definitely seems preferable to a resort fee: it’s not universally imposed (since you can choose whether or not to book a room by phone), and it amounts to less money most of the time, since unless you’re only staying for one night, a one-time $10 fee is less than $10 a night. (Of course, just because it’s preferable to a resort fee doesn’t make it a *good* thing).

    On the other hand, knowing the way corporations operate, it wouldn’t surprise me if all of a sudden it became a lot harder (or impossible) to reserve rooms online, particularly for discounted rates. I’m not saying this is what Harrah’s is doing, but it wouldn’t surprise me if they or someone else decided to do a bait-and-switch – advertising cheap rates, then adding a disclaimer that they can only be obtained by booking by phone, and forcing people to pay the fee on top of the supposedly cheap rate.

  • Joe Farrell

    I love fees that begin with:

    “For your convenience a $15.00 daily resort fee will be added to your room account and includes the following hotel services: Internet access (in suite), local & 800 number phone calls, access to Fitness Center, in-room newspaper delivery, turndown service, and two bottles of water per day.”

    Try getting those 2 bottles of water a day . . .

  • J C

    @ Kimberly – I agree with you that it is deceptive, but what it really comes down to is “Marketing”. To get the lowest price in front of the consumers eyes and hope they will buy anyway after putting in so much effort to get that far. And they don’t want to lose out to another company who doesn’t include all costs. But scam also fits.

  • BG

    I personally experienced this “phone reservation booking fee” two weeks ago as I attempted to make a reservation on-line under my Total Rewards account @ Harrahs.com but I misplaced that info in order to sign into their site so I had no other option than to call them to make my future room reservation for May. Fortunately because I was a Total Reward member and I balked at their charging me such a fee to make a reservation with them directly that they waived it so it might benefit anyone who wants to stay at this hotel chain to just become a Total Rewards Member with them (keep your info readily available unlike me) and then just book on-line as there is no cost to become a frequent stay member and they normally provide the best room rates to those customers anyway. You don’t need to be a high-roller either as I clearly am not. I just heard through friends that are that they get awesome room rates that way so I figured I might as well benefit from that offering too. The only glitch is you have to sign up in person for their Total Rewards program at one of their properties so if you are a first timer going to Vegas / Reno / Atlanatic City or wherever else they have properties then this would not benefit you and you’d have to book on-line with them initially, or over the tele.

    Good luck to all who attempt to stay at a Harrahs.com property in the future as I agree we should NOT have to pay to make a hotel reservation directly over the phone with any hotel chain. What do the consumers do who don’t even have a computer, or have the knowledge or desire to even get involved with one. To me that seems to be a bit discriminating to the healthy number of elderly population which is out there as I know many of my parents friends, and aunts/uncles who are not even the least bit interested in becoming computer savvy.

  • Carver

    These fees are a bit sketchy at best, but in a way they do make some sense. If it costs the hotel more money to make a phone reservation than an internet reservation then they want to steer customers towards the internet.

    @Steve

    I seriously doubt if hotels are going to make it hard to book by the internet. That save the property money, i.e. fewer live people to pay. Computers also don’t ask for benefits, complain, or pretend to be sick. More likely, as I said above, this is to steer customers towards the internet

    @BG

    I respectfully disagree that this is discrimination. Becoming computer savvy or not is a choice. If someone has no desire to become computer savvy that is clearly their right, but they shouldn’t complain when they miss out on various computer only opportunities. And don’t discount the elderly. Many elderly folks are computer literate, especially if they have grandchildren.

  • BG

    Carver,

    I’m entitled to my opinion as you are and I do clearly see it as they are leaving out the segment who may not have the finances or the capability to learn how to use a computer. As well, not every elderly person wants to have to rely on their children to do their booking of travel reservations as many are NOT living with their parents these days and are quite busy with their families. It’s that generations norm to pick up the phone and speak to a live person in order to book a room as that is what they have been doing for years and I as many others agree clearly think this is an unnecessary fee that hotels are beginning to impose. I’m sure in the long run the hotels that go this route in a hard and steadfast manner will find themselves rethinking their position on this after their sales suffer. I’m fortunate to be close with many upper management individuals at several major hotel chains and in speaking with them on this they laughed at the approach which Harrah’s is undertaking so I guess time will tell. To date this is the only hotel group that I have personally experienced this with hence I felt right in sharing what I knew at this time.

    What I find very ironic actually is that the Harrahs live agent took the time to speak with me and get to the point in booking the room and then it was at that time they shared with me the booking fee over the tele vs. telling that to me up front. If I hadn’t been a Total Rewards customer and balked at it which gave them the thought process to offer me a reservation w/o the booking fee since I was w/o my Total Reward # at the time and they can’t share that info over the tele, I would have hung up and most likely either gone to the internet if I felt that strongly that their room rate was the best out there, or I would have gone to a different property. Either way, they already had spent the time, energy and resources to communicate with me. Clearly some training is needed to be done with the Harrahs reservation personnel so that they offer that fee up front vs. wasting their time to find out their not going to book a room after they disclose the additional charge.

  • Chris in NC

    Chris,

    Interesting article. However, the practice of being charged more with a phone reservation vs the Internet is more widespread. In my experience, many hotels and chains are already offering “Internet Only” rates that are anywhere from 5-20% off the lowest listed “non-Internet” rate. Once, I could not get my mobile Internet to work, and the manager at this hotel could not or would not match the “Internet” rate.

    Just this past week, we stayed at this hotel in NM. The lowest listed rate was $99 a night. Calling the hotel directly yielded a rate of $89 a night. The AAA rate was $89 a night. Yet, the “Internet” only rate was $80.10 a night. Couldn’t get the hotel to match the “Internet” only rate by a phone call. Thus, I pulled out my laptop with mobile Internet card, and booked the room via Internet in the hotel parking lot. My wife had a really puzzled look until I explained the above situation. This scenario is not an isolated case. Many times, I book my hotel reservations on the road via the Internet and the rates are lower than anything I can negotiate by phone.

    So, I’m not as appalled as some of the other posters. What I do see is that someone in the marketing department making a silly and pretty stupid PR mistake. Would people feel differently if there was a $109 rate and a $99 Internet-only rate as opposed to a $99 rate with a $10 phone surcharge? Apparently, thats what everyone else is doing!

  • http://vegasresortfees.blogspot.com/ dewey

    If this fee is charged as it is in Vegas, it only applies to reservations made by phone and not to those made online. Also, if Harrah’s online reservations give you difficulty and you call and tell them that, the fee will be waived. This happened recently to me when I wanted two reservations at different Harrah’s places in the same month, using the Total Rewards site offerings. I called for the second and complained that the site would not work for me. They explained that it won’t take two reservations in the same month, and they made my reservation and waived the fee.
    This is in sharp contrast to resort fees which are charged now even on comped rooms in many casinos. The Hard Rock just raised theirs to $15 a day. These fees dwarf that porcessing fee which I think is imposed mainly to encourage folks to book on line and not take up operator’s time unless they have to.
    For my days in April, Harrah’s offered me some of the best deals, all of them on the Total Rewards website. This is in spite of the fact that all I play in live poker. Right now, as far as I know, Harrah’s offer the only casinos that follow live poker play and comp it with room offers. I even managed two free nights at Flamingo.
    On the other hand, they do make it difficult to follow offers and take advantage of them. Once you make one reservation, you can’t use your offers again unless you call. I also complained of this on the phone (with no processing fee) and the operator found my offers and told me she could arrange two free nights in the five nights I was booking.

  • ken

    DEC 12-12-2010… BOOKED HOTEL/FLIGHT PACKAGE THROUGH ALLEGIANT AIR…WHEN TRYING TO CHECK INTO THE ARIA ….HAD TO SIGN A RESORT FEE AGREEMENT OF $22.40 PER NIGHT OR I COULD NOT CHECK IN… WHAT A RIP..

  • karenm

    Ken

    I booked hotel/air thru Allegiant for a Dec visit to Wynn. No mention of Resort fee on booking paperwork in fact stated all fees and taxes included. At check in I asked about Resort fee and was told none due but upon check out had four days fee at $15 a day. No way would they waive the fee even with my email from Allegiant stating all fees paid.

    And what about Allegiant Air charging a Convenience Fee to book air travel on its website?? You can purchase the same itinerary at the Allegiant ticket counter with no fee. This is a per person fee of *I think* $13.99 each. Also they are sneaky with their fee for shuttle from airport to your hotel in the purchase process. You must opt-out of the shuttle transportation instead of opting-in. $14.99 per person automatically unless you catch it.