Regulation & risk
Resort fee
Also written: destination fee, amenity fee
A mandatory daily surcharge added to the base room rate, covering bundled amenities like Wi-Fi, pool access, shuttle services, or fitness centers. Charged per room per night regardless of whether the guest uses the included services, it represents non-commissionable room-adjacent revenue.
Formula
Total Daily Guest Cost = Published Room Rate + Mandatory Resort Fee + Applicable Taxes
How it is used
Operators use resort fees to unbundle room rates, displaying lower base prices on Online Travel Agencies (OTAs) while preserving total RevPAR. Because OTAs traditionally took commissions strictly on the base room rate, these fees allowed properties to lower distribution costs. However, increased regulatory scrutiny from the FTC and state Attorneys General regarding mandatory drip pricing is forcing operators toward total price transparency. Revenue managers must weigh the net revenue gain of unbundled pricing against potential guest dissatisfaction, negative reviews, and legal compliance risks in advertisement disclosures.
Worked example
A beachfront hotel advertises a $200 base room rate alongside a mandatory $40 daily resort fee. A guest staying 3 nights pays $120 in resort fees ($40 × 3). The hotel captures $720 in total room and fee revenue before taxes, presenting a $200 rate on search engines while achieving a true average daily yield of $240.
Common mistake
Excluding mandatory resort fees from initial advertised rates violates emerging consumer protection laws and transparent pricing regulations in multiple jurisdictions.