Marriott to prominently display resort fees this month

NATIONAL REPORT – Marriott International in mid-May is going to prominently display on its website and mobile app rates inclusive of resort or destination fees, according to multiple reports. Marriott is making this required moved based on a 2021 settlement in a Pennsylvania court regarding resort fees as a deceptive practice. Call center agents will also have to quote prices inclusive of fees.

Now the question becomes how quickly other hotels, hotel companies and online travel agents will follow suit before similarly pursued by states. As of now, OTAs such as Expedia can show Marriott rates with resort fees displayed much less prominently.

Marriott issued a statement on Monday afternoon: “Marriott International is committed to providing customers with clear and transparent pricing. We have long been focused on ensuring that any resort/destination fees charged by hotels are separately and clearly stated. We have been working diligently over the last several months on the technology required to update our room rate display and further enhance the way these fees are disclosed, in accordance with our agreement with the State of Pennsylvania. In fact, when we deploy our changes by May 15, 2023, we expect to be the first hospitality company to change its display, leading the industry on this important issue."

During Tuesday's 1Q earnings call, Marriott President and CEO Tony Capuano added, "We've already been showing it [additional fees]. The discussions we've been having with the various various jurisdictions are just about making sure that the transparency of those disclosures are enhanced and crystal clear for our guests," he said. "It is not as if those were hidden somehow. And we're simply further clarifying and enhancing that transparency. I will leave it to the state agencies around the rest of the country for the rest of the industry. But I am pleased that we will lead the industry in terms of the transparency of our disclosure for our guests."

Hotel Investment Today reached out to industry insiders for comment with asset manager Michelle Russo of New York City-based HotelAVE saying, "We will be monitoring rate parity via meta searches (think Kayak) to confirm that these searches will pull the non-member rates from Marriott.com versus Marriott rates from the other booking channels as well as whether the change in presentation of rates on Marriott.com results in any reduction in demand from the brand.com source. We expect that others will follow suit as there is a government desire to address this issue holistically and not just for one company."

Trevor Stuart-Hill of revenue management firm Revenue Matters, Englewood, Colorado, added, "While this may be helpful for potential guests who shop based on price alone, it will have a knock-on effect for the industry that may make booking travel more arduous (and likely more expensive) in the future."

Stuart-Hill said quality properties have always resisted commoditization, particularly since the mid-90’s as OTA’s emerged. "OTA’s are rewarded for driving transactional volume and have historically used price as the primary lever to do so. Articulating the value proposition for a guest is more readily accomplished through proprietary channels such as the property‘s own website or call center. It is much more challenging to accomplish this through third-party channels such as OTAs or legacy GDS systems.

The consequences for consumers are numerous, said Stuart-Hill, and include confusion resulting from a potential departure from perceived rate parity across channels. "Properties are likely to be forced to move towards unbundling rates where valuable elements are stripped and individual components will need to be repurchased at a premium to reach the same original level of offering," Stuart-Hill said. "Why? If loyalty members have access to rates that include value-add features, they will need to trust that the value they receive from these packaged components is greater than what they would have paid if they purchased these components individually."

He continued by stating that the airline industry serves as a good example of how unbundled pricing has been received by travel arrangers and the traveling public.