Hotel & Resort Fees & Taxes

Hotel & Resort Fees & Taxes
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The hidden world of added extra fees and taxes at hotels and resorts.

• General: Educational

Ever book a hotel room for a certain price only to be charged a much higher price when you checkout? Welcome to the world of accommodation taxes and resort fees. It's a dirty, disgusting world that hides a lot of the cost of lodging in Hawaii and everywhere else in the world.

But if everyone is doing it, that's okay right? No, that's not okay. The problem is how much these extra costs are, what you're getting for your money, and how they're presented or hidden from you when searching for and booking rooms at hotels, resorts, condominiums, etc.

What Is A Resort Fee?

Let's talk about resort fees or hotel fees or amenity fees or whatever resorts like to call them this week. Basically, the resort will toss a few free things your way and then charge you for the privilege of those freebies.

In many hotels and resorts, you'll be given something like free Wi-Fi, a free lei greeting, a free daily newspaper, and free local phone calls. I've been in hotels for 2 weeks where one of the freebies was 2 bottles of water, one time. A family of 4 checks into a hotel and you offer us 2 bottles of water one time? That's an insult!

These so called free items will then be charged back to you in the form of a $20 to $40 daily resort fee. If you look at most of the freebies you get, it's not stuff you want anyhow or it's stuff that should just be free. I can go to the cheapest motel on the planet and get free Wi-Fi so it's not really a "perk" I should pay for in a $400+ per night resort. Sometimes they'll even put a value on these freebies, like you're getting $129 worth of amenities for only $30 per night. Wow, thanks!

And who reads the morning newspaper anyhow? And free local phone calls? Are you kidding me, I'm not using your phone, we all have our own phones these days! On that note, I'm probably not using your terrible, slow Wi-Fi anyhow and will just use my own data plan that, well, works.

Some hotels will include parking in their daily resort fee, others will still charge extra for parking but more on that next. Either way, you should plan on an extra $30 per day on top of the room only rate you see advertised.

Parking Fees Too?

That's right, you have to pay to park at many Hawaii hotels. Certainly you'll pay to park at every Waikiki area hotel and resort and the prices will vary from around $20 to $35 per night and this can be on top of your resort fee. This is an important fee to look up and know about because this adds up fast. Imagine another $300 tacked onto your 10 day vacation that you otherwise didn't plan for!

And don't think that a parking fee includes valet parking as it is often just the cost to self-park your car. In some hotels, like the Grand Wailea A Waldorf Astoria Resort, you'll pay around $30 per day to park. In that case, the parking is valet only. There is no self-parking which means you're going to be out a few dollars in tips every-single-time you retrieve (but not park) your car. That rental car can cost you $40-$50 per day extra in parking and in tips if you're not careful. Be sure to read more on Tipping. You should also read Do I Need To Rent A Car In Waikiki? and Do I Need A Rental Car In Hawaii?. What was $300 extra for a 10 day vacation could be closer to $500 now.

How Much Are Hotel Taxes?

First, let me thank you for paying ridiculous amounts of accommodation taxes here in Hawaii. We appreciate that money as it supposedly makes our like and infrastructure here better. I mean, we don't see those improvements but we're told it makes our streets better and all that non-sense so it must be true.

The actual taxes you pay are broken down into two separate taxes which are GET and TAT. GET is General Excise Tax and what other states simply call Sales Tax. You'll pay around 4% on most islands, but on Oahu we have a surcharge that brings it up to 4.5% which is supposed to pay for our Honolulu Rail Transit. Technically, that 4.5% will actually be more like 4.712% because companies are allowed to charge 4.712% on a 4.5% tax rate. Why? Because they're actually taxed on the collected 4.5% taxes so the state lets them collect 4.712% to cover the tax on the tax. And this is why it's not called Sales Tax but GET, because it's slightly different and hugely stupid.

TAT stands for Transient Accommodations Tax and is another tax on any furnished property that is rented to someone for less than 180 consecutive days. So hotels pay 9.25% in TAT. The idea of TAT isn't bad, but the execution could be so much better and transparent.

So let's do an example with a $250 per night hotel room which will tack on $11.78 in GET and $23.13 for a grand total of $284.91 per night. Over 10 nights that's an additional $350 and before any resort fees or parking fees. Add those in and you could be talking about another $600-$900 (or more) over 10 nights.

Booking Done Right

On the flip side, let's look at a resort like Aulani A Disney Resort And Spa which doesn't have any resort fees. Sure, you're going to be paying more for the room at a resort like this but they won't tack on any additional resort fees and I'm just using them as an example. A quick price check for a room in July (peak season) turns up a $591 USD price tag per night.

What's interesting is that Disney's booking system actually includes the total price of the room and that includes tax! That is the complete out-the-door price for a night at Aulani. When you get to the checkout page they break it down and explain that the room is $519 per night, no resort fee is present, and the tax is $72 which gives a grand total of $591 per night, the same that you see when looking for a room.

Bottom Line

As we've seen with the Disney example, clearly it is possible to create a booking system that isn't misleading at all. Sure, it adds to the sticker shock initially but it feels honest and makes me want to book with a company that is transparent on the money side. Honesty at this stage of the research and booking process gives that company a big advantage over their competitors.

But we live in a Walmart world and companies want to show you the lowest possible price they can. Once one of them does it the "wrong" way, the rest feel obligated to follow so that when you're comparing prices you're comparing apples to apples, or room-only rates to room-only rates. It's a marketing trick and we fall for it so who's really to blame here, them or us?

Until these companies become more upfront in the way fees and taxes work it's up to you as the consumer to do your homework and make sure you understand all charges before booking a your lodging. And while you're at it, make it known to the hotel that you don't like how they hide taxes and fees. For other money saving tips, check out Make Your Impossible Trip Happen With These 10 Tips To Save Cash.