New documents shed light on just how much Marriott makes from resort fees — and why they exist in the first place

Oct 30, 2021

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The long-despised resort fee may have its day in court soon — although a major hotel company may not like the outcome.

Recently unsealed documents from the lawsuit filed against Marriott International by District of Columbia Attorney General Karl Racine show how lucrative these additional fees — added on to the base price of a hotel room and not always prominently displayed during the booking process — can be.

According to depositions from current (and retired) Marriott executives, the company’s self-managed resorts made hundreds of millions of dollars in prior years — including $66 million (£47.9 million) in 2012, $82 million (£58 million) in 2013 and $58 million (£42.1 million) in the first half of 2014. These figures go to the bottom lines of owners of individual properties that have management contracts with one (or more) of Marriott’s 30 brands.

But this has also been a source of profit for Marriott International itself, as the parent company made approximately $17 million (£12 million) from the imposition of resort fees in 2019.

“AG Racine filed this lawsuit because of these facts,” a spokesperson for D.C.’s office of the attorney general said in an email to TPG. “Now we have them confirmed by executives at the company and from the details about the tens of millions of dollars Marriott made off resort fees.”

But while these numbers are certainly interesting, a more notable takeaway from these documents — particularly the District’s statement of material facts, or SOF — is how (and why) Marriott’s definition of resort fees has evolved to impose them more broadly across its portfolio.

Related: Here’s how to avoid paying resort fees

The Scrub island Marriott is just a private ferry ride from St. Thomas. Marriott Rewards topped this year's list of hotel rewards programs. Photo courtesy of the resort.
The Scrub island Marriott is just a private ferry ride from St. Thomas. (Photo courtesy of the resort)

Originally, Marriott’s imposition of resort fees was limited to properties that could be truly considered resorts. While there were no clear criteria for making this determination, a February 2014 email cited in the SOF indicated that a “few very non obvious resorts request[ed] a resort fee and were turned down.”

However, by October 2014, the company had created a new category for these additional costs: “destination fees” or “destination amenity fees” — with one executive going so far as to state that these fees were imposed because Marriott was “at a competitive disadvantage in a number of markets.” And another 2014 email laid bare the underlying intent of these fees: “One of our primary areas of focus to drive Ancillary Revenue and profit is through the thoughtful execution of resort fees.”

When asked about this statement, the executive highlighted that his job “is to run a profitable company, and we do that through a balanced scorecard. So it wouldn’t surprise me to say that we are driving revenue. We wanted to have profit.”

Racine’s spokesperson drew attention to this in her statement to TPG as well.

“As alleged in the complaint, Marriott is taking advantage of consumers by purposely misleading them about the price of rooms just to increase the company’s bottom line.”

Now, it’s worth pointing out that Marriott is not alone in imposing resort fees — and it’s not the only company facing potential litigation. A travel advocacy group filed suit against MGM Resorts earlier this year, while Hilton Honors was sued by Nebraska’s attorney general back in 2019. However, these unsealed documents shed new light on Marriott in particular.

So what does this mean for TPG readers?

For now, not much. Marriott properties will continue to impose these resort or destination fees — and unfortunately, these fees are still incurred when Marriott Bonvoy members redeem points for free nights. This is notably different from Hilton Honors (which waives resort fees on all award stays) and World of Hyatt (which waives resort fees on all award stays and for top-tier Globalist members on paid stays).

However, that could change as the suit works its way through the courts.

We reached out to Marriott for a statement, but a spokesperson declined to comment.

Featured photo by Sundry Photography/Getty Images.

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