Sneaky fee alert: ‘Urban Destination Charge’ added to hotels just in time for the holidays

Move over, resort fees. There’s a new enemy in your quest to get a good deal on a hotel room: The “urban destination charge.”

Travelers cramming into New York City to catch a glimpse of the famous Christmas tree outside Rockefeller Center are now getting hit with a relatively new $25-$35 fee, several outlets have reported.  Sometimes, the “fee” comes with a few free drink tickets or whatnot to ease the blow. But make no mistake: It’s not a fee. You can’t book a room without it. Therefore, it’s simply part of the price.  Since the fee often isn’t disclosed to consumers before they book, depending on how they book, it’s a Gotcha.

Frustration about the fees can be found easily.

“Hotels’ mandatory “resort fees” are bullS&&&,” wrote the usually level-headed law professor Eric Goldman.”So are the latest euphemism: ‘urban destination charges’ …If the @FTC doesn’t crack down, expect every hotel in the country to hide their real prices.”

The fees began sneaking onto bills more than a year ago, but came to attention last week when highlighted by British newspaper, the Independent. 

It called out Times Square hotels for the practice, which has irritated many international travelers. But urban-y fees have spread well beyond Times Square. Popular boutique hotel NYLO, at Broadway and 77th, also charges the fee, for example. A consumer on TripAdvisor complained about the fee in November of last year.

“NYLO use to be my favorite hotel. I use(d) to stay there on the average once a week. Now they advertise one rate and then tack on an extra $25 Urban Fee,” the consumer wrote. “Sure the fee includes the internet, two glasses of house wine, the fitness center, water and a couple other things. The truth is, NYLO gave you all these things except the wine before. This Urban Fee just makes you feel like they are squeezing you for a little more money. Very disappointing and short sited.

Perhaps disappointing, but not short-sighted.  Another consumer reported in July that the fee was $27.

Try to book that Nylo for a room in December, and the Urban fee for a $200-a-night room is now $35.58– adding about 17% of the cost of the room. The fee is disclosed to consumers at checkout, but easily missed or misunderstood because it’s listed smack in the middle of a bunch of taxes. Click on the “details” link, and you’ll see the fee is “mandatory” and includes a free bottle of water, along with Internet access.

How did this happen? Well, crammed city hotels that are decidedly not resorts became jealous of resort fee revenue, and decided to invent their own misleading money grab.

It’s also a function of potentially declining revenue from hotel Internet access charges. Many consumers bring their own WiFi now as part of their cell phone plans, so they can skip the $15-a-day Internet fee.

The new fee comes at a time when the hotel industry is under increasing scrutiny for the resort fee practice.

After years of complaints, in early 2017, the Federal Trade Commission published a detailed report  resort fees.   Here’s what that agency concluded after a long-term study by its Bureau of Economics:

“Separating resort fees from the room rate without first disclosing the total price is unlikely to result in benefits that offset the likely harm to consumers.”

That’s sure a modest conclusion. Dig into the report, and you’ll find this:

“In 2015…consumers paid resort fees estimated at about $2 billion, 35 percent higher than the previous year.”

Money like that made invention of an equivalent non-resort fee inevitable. So if you are booking hotels for the holiday season — anywhere, not just in an “urban” area — be sure to compare the FINAL price.  Nothing else matters.  Aftercharges and gotchas can turn a good deal into a bad deal very quickly. Be particularly careful when using travel aggregation sites, which can do a bad job of pulling in all associated fees when ranking rooms by price.

Don’t let an Urban Destination Charge play Scrooge to your holidays.

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