New York joins the global crackdown on hotel “junk fees”. But are resort fees the real problem, or how they’re structured?
Another regulator has stepped into the long-running debate over hidden hotel charges.
New York City has announced that hotels and booking platforms must now display the final total payable price upfront at the time of booking. The move follows similar actions across parts of Europe and California, and aligns with guidance from the Federal Trade Commission. The target: mandatory add-ons commonly called resort, destination or amenity fees, often labelled by regulators as “junk fees”.
While the policy is framed around transparency, it raises a broader question for the industry: how do these fees actually function, and who benefits from them?
How resort fees became a revenue line
Resort fees first appeared in the early 1990s at leisure destinations. Over time, they spread well beyond resorts into city hotels and business properties. What began as a niche add-on is now standard practice in many U.S. markets.
Today, travelers pay an average of $40–$45 per room per night in resort fees. Total annual spend is estimated at ~$3.4 billion, up sharply from ~$2 billion pre-pandemic. Over the last decade, the growth in resort fees has consistently outpaced average daily room rate increases by nearly 3:1.
For some operators, these fees now account for as much as one-sixth of total hotel revenue. The inclusions vary widely. At certain properties, the fee genuinely funds experiences like sunrise rooftop yoga, bike rentals through Central Park, or, at resort destinations in Hawaii, lagoon access, snorkeling gear, paddleboarding or kayaking lessons. At others, it covers Wi-Fi, bottled water, or basic services that many travelers already assume are included. The inconsistency is where friction begins.
Why hotels defend the model
Hotels broadly justify resort fees on two grounds:
First, separating fees allows the base room rate to appear more competitive on OTAs and metasearch platforms. In price-led search environments, a lower headline rate can improve visibility and conversion.
Second, most resort fees are non-commissionable. With OTA commissions often ranging between 15–25%, keeping part of the revenue outside the room rate helps protect margins. In an industry where net margins are typically in the low single digits, this distinction matters.
Operators argue that the additional revenue supports investments in amenities and guest experience without pushing up the advertised rate.
Why travelers push back
Many of the bundled services such as Wi-Fi, fitness centers, pools, are now considered standard amenities, not premium add-ons. When guests are charged separately for them, it often feels like forced bundling rather than added value.
Usage data underscores the disconnect. A 2019 study by Boston University’s School of Hospitality found that while 66% of guests expected to use in-room Wi-Fi, only 42% did. Fewer than 22% used fitness centers, despite their frequent inclusion in resort fees. At the Four Seasons Las Vegas, the daily resort fee still covered faxes and local calls as of late 2025, amenities largely irrelevant to today’s traveler. These low-demand services persist in resort fee bundles not because guests use them, but because they generate high-margin, non-commissionable revenue. That mismatch between expectation and delivery is what’s driving today’s regulatory crackdown.
Transparency is step one. Standardisation is step two.
Policies like New York’s focus primarily on what travelers are paying, ensuring the total price is visible upfront.But the larger issue may be what travelers are actually paying for.Simply disclosing the fee does not solve the underlying value question. A $40 charge that covers meaningful, widely used services is very different from a $40 charge that bundles rarely used basics.
A more durable solution could be standardisation, either clearer definitions of what a resort fee must include, or minimum service commitments tied to charging one. Optional or usage-based models would be even more consumer-friendly, though harder to implement operationally.
For the industry, the debate is not just about fees surviving regulation.
It is about whether those fees can be structured in a way that is transparent, consistent and genuinely valuable.