Resort Fees and Service Fees in the U.S. Hotel Industry: Context and Concepts Related to Partitioned Pricing

Though hotel resort fees and other service charges are a source of considerable revenue at certain U.S. hotels, most hotels do not charge such fees, and among those that do, they do so for specific and unique market-based reasons such as the behavior of competition. This report reviews the concept of resort fees in an effort to provide a balanced perspective regarding service fees in the light of sensational media reports about the topic. This report finds that only approximately seven percent of U.S. hotels charge such fees, and such fees are mainly limited to resort hotels in certain markets. This report introduces the topic of partitioned pricing whereby prices quoted to consumers by businesses are broken into their component parts, a practice appearing to be common, appropriate, and preferred by consumers as well as businesses in particular types of transactions which may include certain hotel-consumer sales.