Vegas resorts use airlines’ strategy in adopting fees, but will it fly with consumers?

Richard N. Velotta

Richard N. Velotta

The world is filled with consumers who favor one product over another.

There are Apples and PCs. Cokes and Pepsis. Coxes and CenturyLinks. McDonald’ses and Burger Kings.

And, in the tourism world, there are bundlers and unbundlers.

The Southern Nevada resort community has taken sides in the debate in the form of resort fees. Last month, another company — the South Point — crossed over from the unbundling side by introducing a $14 daily resort fee for guests.

The move follows the biggest shift the city has seen since March 1, when Caesars Entertainment ditched its no-resort-fee marketing ploy to begin charging between $10 and $25 a day at its eight Southern Nevada properties.

Representatives of Caesars said the public wanted resort fees. I don’t think that came out exactly the way Caesars intended. Nobody asked the company for a new fee. What the company meant is that more guests preferred one fee to cover everything instead of multiple charges on a variety of add-ons.

There are now about 32 hotels, including most of the downtown properties, that don’t charge a resort fee.

Who wins when a company institutes a one-size-fits-all resort fee? In almost every case, it’s the resort.

Consider what resort fees pay for: in-room Internet access, local and toll-free telephone calls, a daily newspaper, shoe shines, access to a fitness center, airline boarding pass printing, copy and fax machine use, in-room coffee, bottled water and discounts at shops and restaurants on the property.

How many of those services do guests actually use?

The common complaint the bundler crowd has is that they dislike being “nickeled and dimed” and would rather pay one time instead of getting billed for every little thing.

The problem is, in the long run, consumers usually pay more than they would if services were unbundled. Remember, the fees are charged daily. A $14 charge doesn’t sound like much, but for a three-day stay, it’s an additional $42 on top of the room cost and tax.

One way to dodge fees is to check with your company to see if they have a loyalty club. Some companies reduce or eliminate fees for guests who stay frequently at a property.

The room fee debate isn’t much different than the bundling vs. unbundling argument in airline travel. Most airlines have adopted a fee structure for value-added services.

Some, like Las Vegas-based Allegiant Air and fast-growing Spirit Airlines, embrace the unbundled model and offer a deeply discounted fare but charge for suitcases, carry-on luggage, preferred seating and onboard snacks and drinks.

Southwest Airlines, meanwhile, markets to the bundler crowd, emphasizing that “bags fly free.” But the airline also has started to play the fee-charging game to generate additional revenue.

The company’s Early Bird program, for example, enables customers to cut toward the front of the boarding line for a price. Passengers can buy that privilege for $12.50 (it recently was increased from $10).

So where do you stand? Are you a bundler or an unbundler?

Deciding that may influence where you stay and how you get there.

Tags: Opinion, Business
Real Estate

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