Theme Park Insider

Businesses Should Give Guests What They Want - Real Prices

March 11, 2016, 4:18 PM · The news that Walt Disney World has surveyed guests about adding a resort fee to its hotel bills has angered many Disney fans online. Resort fees are have become common on hotel bills across the country, despite the fact that travelers hate them. Along with local taxes, service charges, facility fees, and fuel surcharges, resort fees provide just one more way that travelers' final costs are inflated over the prices that they were quoted.

People who travel outside the United States know that this isn't the way that travel has to be. In many other countries, the price you see on a menu, an itinerary, or a price sheet is the price you actually pay. There's no need to do math in your head... and no surprises when the final bill arrives. Taxes and fees are built into posted prices, so that everyone knows what their payment will be in the end.

That's not the way that pricing works in America, however. Taxes are computed at the register or check out, and over the years, many businesses have taken advantage of that to add on various private charges of their own, as well.

Mandatory resort fees started showing up on hotel bills about a decade ago, travel columnist and consumer advocate Christopher Elliott said. "When the FTC [Federal Trade Commission] declined to stop hotels from adding them to the final price, hotels saw that as a green light from the federal government," he said. "So we've seen them increase significantly in the last year or two."

Many Disney fans have appreciated the company not playing the resort-fee game, and they've been willing to pay higher up-front rates for Disney hotels in part to avoid the back-end surprise when checking out from other resorts. But if Disney starts adding resort fees, those attitudes might change.

"If I have to start paying resort fees to stay on property, it will no longer be a value to me," one reader wrote in our previous post on Disney resort fees. "I'll go off-site instead."

Ultimately, for most tourists, it's not about the money — it's about the deception. If we know the prices for competing rooms, flights, meals, and travel amenities, we can compare those prices against the relative quality of each to make our decisions about which purchases will provide the best value for our money. We sometimes pick the higher-priced option, too. Smart travelers know that the lowest price isn't always the better deal.

But when final prices are hidden by undisclosed or cleverly hidden taxes, fees, and surcharges, it's hard for us to make a fair decision. Worse for the travel industry, the knowledge that we don't know the final price for anything leads many of us to fear spending on extras during our vacation, just in case we get hit with bills that were higher than we expected. A @ThemePark Twitter follower from the United Kingdom concurred:

One frequently-cited justification for the current system is that varying state and local tax rates across the country would make it impossible for national retailers to advertise a single price if that price had to include all applicable taxes and fees. But that's no excuse for why travel search engines can't sum up the charges for a specific hotel or flight when presenting us with a price to consider. Or why restaurant menus or in-store merchandise labels can't just tell us the final price for each item. (Let's not get started on the whole issue of tipping, except to say that we could write another post on that, too.)

Heck, in an era when more and more advertising — and more and more pricing — are tailored to individual consumers, how many businesses run national ad campaigns that cite a single price anymore, anyway?

By keeping some charges out of view, travel businesses are angering their customers... which might be encouraging those customers to spend less, not more, on travel. That's not good for businesses in the travel industry, and it's not good for consumers who just want to get a fair deal and have a great time on their vacations. I love the clarity of up-front pricing abroad and would love to see this practice come to America someday, too.

Replies (29)

March 11, 2016 at 4:52 PM · As a foreign visitor to the US, I was always puzzled why apparently it was possible for some street vendor carts (in US cities as well inside Disney parks) without cash registers to have prices on their price signs or menus that included sales tax (even saying so at the bottom of the price sign) while the restaurant right next to it only had prices excluding sales tax on their menu.
March 11, 2016 at 5:50 PM · Example of a price sign of a Disney snack cart that has tax included in the shown prices:

http://disneydaybyday.com/wp-content/uploads/2015/08/Favorite-Food-Friday-Disney-Food-Cart-DisneyDayByDay.jpg

March 11, 2016 at 5:04 PM · You expect a business to regulate itself?

Actually, the real truth is there are customers who don't care what the price is, they'll pay (even if they can't really afford it). I don't know what's worse: the company that sees the carloads of guests as rolling piggy banks, or the guests willing to spend big because they think it's a "rite of passage" or can't live without it? The two are symbiotic, enable more outrageous spending opportunities, and cause an endless cycle of one-upmanship.

March 11, 2016 at 10:04 PM · "...without cash registers to have prices on their price signs or menus that included sales tax"

Shops have the option to include or add it to the price. People remember the price on the label and many just pick the lowest listed price. Not to mention people really remember the first digits so 1.95 sounds much better than 2 bucks. Doesn't have to make sense to be true.

Perception Trumps fact. But the perception is changing. But pricing won't change until People change how they act. Look at baggage fees. Southwest has none on normal load. Most airlines charge every bag. And then there's Spirit which charges fees for everything short of pay toilets. . Southwest has a loyal following, but so does Spirit. In the end, there's a market for both approaches. With some work, you come out ahead at one of the extremes.

March 11, 2016 at 11:48 PM · As a frequent visitor to the US, especially Disney, I do find it odd they can't just post the actual price. I am from the UK and an example I can use is Costco, in the UK they show the price excluding tax on the stub of the item in large print and in small print on the same stub show the price including tax. Why can't this be implemented, and if it is it then it lends the argument as to if you've already calculated the tax, why not just show the final cost?

I don't understand the argument of its too complicated to do it for each state and tax area, no it's not, the cash machines are programmed with the tax for each state, this can be easily reproduced on a pricing gun or barcode machine.

March 12, 2016 at 1:23 AM · It's not always all inclusive in EU.
For instance, in the Netherlands you need to add a dayly tourist tax upon room costs. They vary between cities and are often between 1 and 2 euro a day. Booking costs are also a crappy hidden cost, but in Germany they are forbidden to be added afterwards.
But I think you are right, have one price shown and that beeing the actual price you need to pay gives a much more realisitic view of the costs. I'm sure that won't benifit Disney because it would temper guest spending and that is the only thing they care about.
March 12, 2016 at 6:47 AM · Blame the ressesion for this and those stupid baggage fees.
March 12, 2016 at 7:53 AM · As a European, I'm not familiar with a resort-fee. What would be included in it and how high could it be for instance, so I can get an idea?
March 12, 2016 at 8:47 AM · I would happily pay more at restaurants to no longer have to tip. I also think we should discontinue free soft drink refills. The refill price would help restaurant revenue in a slight way. Plus, from a health perspective, it would lower sugar intake.
March 12, 2016 at 11:38 AM · European governments actually try to protect their consumers. America is no longer a functioning democracy. The Wall Street/Washington oligarchs are ruining our country for their own extremely, shortsighted benefit. Penny wise, pound foolish.
March 12, 2016 at 2:06 PM · I remember years ago- MANY years ago- that Cedar Point mentioned on all their pricing signs that tax was already factored into the price due to an agreement between Cedar Point and the State of Ohio. That was great,and it usually rounded the price up to avoid having to deal with a lot of pennies. I don't know when it stopped or why, and I haven't thought about it in years.
March 12, 2016 at 2:41 PM · Charging so-called resort fees is weasel behavior. Nuff said.
March 13, 2016 at 10:02 AM · To the anonymous person, nobody has to go to Disney or any other resort. As much as I hate how expensive Disney is, the reason they get away with is because plenty of people are still willing to pay it. If they were overcharging drugs or food or water, (and I mean everyday groceries, not eating out at a theme park or a restaurant) I'd say you're right and that people are being taken advantage of, and things do need to be done to keep prices reasonable. But going to a resort or a theme park is a luxury, and while I don't like such buisness practices, the best way to stop it is by voting with your dollars.
March 12, 2016 at 3:10 PM · Isn't really just a bait and switch approach to business? They figure that if they told consumers what the total cost would be up front that they'd be less willing to buy.
March 12, 2016 at 3:15 PM · I don't understand why you Americans don't get that government you elect to force "Honest pricing" - headline figure includes all unavoidable fees, taxes and charges.
March 12, 2016 at 3:15 PM · I don't understand why you Americans don't get that government you elect to force "Honest pricing" - headline figure includes all unavoidable fees, taxes and charges.
March 12, 2016 at 3:26 PM · The problem is that when the sign shows the price as $3.75 for a Mickey Bar, and you buy two of them ($7.50), the price "may" have been a penny cheaper if they added tax after the fact. OK, it's only a penny, but that adds up after selling thousands of them. Taxes are rounded up to the next whole cent. Does the government really get that extra cent? I suspect Disney (or any other retailer) pays the tax based on their total sales.
March 12, 2016 at 3:26 PM · The problem is that when the sign shows the price as $3.75 for a Mickey Bar, and you buy two of them ($7.50), the price "may" have been a penny cheaper if they added tax after the fact. OK, it's only a penny, but that adds up after selling thousands of them. Taxes are rounded up to the next whole cent. Does the government really get that extra cent? I suspect Disney (or any other retailer) pays the tax based on their total sales.
March 12, 2016 at 5:08 PM · Government is incapable of honest pricing when they are in the scam too. Why do you think most prices do not already include sales taxes? They are only added after the sale. Before then, the prices can vary. Its hard for merchants to figure out taxes when they can change at any moment due to many market and bureaucratic reasons. Customers need to read the fine print. That's hard.
March 12, 2016 at 9:30 PM · (Sigh)...same crap...people complaining that Disney's too expensive... claiming that their abusing their fans...but just like always, all this complaining is ultimately gonna amount to nothing. Disney's gonna continue breaking attendance records, and they're gonna continue making a crapload of money. Do I think that it's impossible to get Disney to change their pricing structure? No. But I think the problem here is that no one's actually doing anything. I'm seeing a lot of talk, but not a lot of walk. You can complain on the internet all you want, but it's not gonna change anything unless you actually try to fix the problem yourself. If you really think Disney needs to see the error of their ways, then start a boycott of Disney and get a crapload of people to join. Then that'll probably get them to consider lowering prices. Otherwise, don't be surprised if they continue to raise prices and charge these hidden taxes and fees.
March 13, 2016 at 11:04 AM · When the price includes the tax, it obfuscates how much of the final price is tax. I'm from the UK, where sales tax is 20%. People complain about the high cost of living here, but often don't realise that 1/5 of their purchases are going to taxman (and that's not including all the other taxes on stuff).

Keeping the price and the tax separate allows transparency in how much the tax is actually costing the consumer. It will be part of the reason as to why sales taxes are generally much lower in America than they are in Europe.

Tourists having a bit of a shock the first time they buy something is a small price to pay for the thousands of dollars American families save annually in not having to pay higher taxes.

March 13, 2016 at 1:02 PM · For me, what I can afford to pay is different than what I'm willing to pay. 20-25 yrs ago we would routinely go to WDW yearly or every other yr, stay at a Disney hotel for a wk. This frequency has decreased over time. The last time we stayed at WDW was 2008 at AK lodge. We have been to Orlando twice since then, once to Universal (stayed there). The last time was 2013 for a dog show, we stayed at the Doubletree by SeaWorld. This was because the hotel was close to the convention center. Cost has been a major factor in how often we go to Orlando, where we visit & where we stay.
March 13, 2016 at 1:25 PM · Must say when I look for my Disney stay one of the advantages I like by staying on site is that there is no resort fee sect, makes paying extra to stay on site a little sweeter but take that sweetner away and it may start people me included to look at off site options more deeply
March 13, 2016 at 1:37 PM · This doesn't go on anywhere else in the world but America. Pure rip off.
March 13, 2016 at 4:21 PM · One of the greatest advantages of being a consumer is the ability to price compare.

You can make a reservation at a Holiday Inn outside the WDW Resort and then rent a car at the airport, drive to the hotel, drive into the WDW Resort everyday, fight traffic, pay for parking and then walk to the gate.

Or you can make a reservation within the WDW Resort INCLUDING any associated fees and then just relax while you utilize the WDW Resort transportation system, starting at the airport!

KNOWLEDGE AND CHOICE EMPOWER THE CONSUMER!

March 14, 2016 at 10:30 AM · As someone who lives in a sales tax free state it does drive me a little crazy when I go to pay for something in another state when I have pulled out only the correct amount of cash just to find out it is more. Just put the price with tax included. You almost think they do that just so they can show the higher expense isn't their fault. The same reason Disney wants to do it. Add it later and hey it really isn't part of the cost. Or at least they claim.
March 14, 2016 at 11:57 AM · March 14, 2016 at 10:30 AM · As someone who lives in a sales tax free state it does drive me a little crazy when I go to pay for something in another state when I have pulled out only the correct amount of cash just to find out it is more. Just put the price with tax included. You almost think they do that just so they can show the higher expense isn't their fault. The same reason Disney wants to do it. Add it later and hey it really isn't part of the cost. Or at least they claim.

Dave, could not agree more, being from the UK it seems strange not to advertise the price you pay at the till, you go to buy some thing and think you have enough money only to find you have not, wonder how many times people go to pay who are outside these states and they realise they don't have enough and tell the sales assistant they no longer want the item, must add extra work time from that alone to justify not to advertise the price without the taxes, seems a really strange way of doing business to me.

March 14, 2016 at 11:58 AM · The Swan and Dolphin (not owned by Disney but on property) have been charging a resort fee and parking is no longer free.
March 14, 2016 at 4:42 PM · You're conflating a couple of things that have entirely different origins and arguments.

With regard to taxes, including them or not is very much a political thing. One argument goes that, when taxes show up on most every receipt, people are more likely to notice when politicians hike the rate. That may not be true on your vacation when you're away from home, but it's certainly something many people pay attention to at home. Obviously, it's less convenient to have tax as an add-on, but the nature of politics often involves a tradeoff. What some would call "inconvenient" others would call "transparent."

I'm somewhat surprised you didn't point out rental cars, where the combination of taxes, concession recovery fees, and numerous other "below the line" charges can add 30-50% to the quoted price of a rental. I've always found that to be one of the more egregious situations, where government taxes are levied alongside vendor "fees" (like concession recovery) that should be built in.

Oddly, taxes are included in some transactions, like airfare - and again, many make a strong argument that those taxes should be broken out. Same with gasoline. People complain about the high prices of gas, but rarely realize that almost a third of the pump price is actually going to the government. The government is happy to let the "rich oil companies" take the blame, though, which is why taxes are never called out as line items. In fact, you include flights in your statement that there's "no excuse for why travel search engines can't sum up the charges," when in fact they all do so for airfare. Expedia and others have tried to do so for resort fees, and at least try to call attention to properties that charge resort fees, but the resorts typically fail to disclose those fees in their reservations systems, meaning the travel sites have no way of including those in the sum.

Making the hotel resort fees are an entirely different animal. If a resort fee is in fact a "bundle" of amenities THAT YOU CAN OPT TO PURCHASE, then you can obviously decide if it's valuable or not - and that's how many resort fees began, back in the day. Making them mandatory is just deceptive, and it's simply - as you point out - so that properties can advertise a low-low rate while still making a designated profit margin. At least with taxes, you have an expectation - US citizens know that taxes aren't included, and we've grown up with that, and the tax rate itself isn't a surprise to anyone who lives in an area.

I'll suggest that taxes are never "cleverly hidden," as you wrote. True, to someone from outside the US the add-on of taxes is unusual, but there are plenty of customs in those countries that would perplex a US citizen. We have different systems. Taxes *should* be up-front and predictable - in any event, they're rarely "deceptive" if you understand the basic system that pervades the entire US. Even "tax free" states - e.g., those lacking a standard sales tax - often have other retail taxes like on hotel rooms, rental cars, and so on. Those from outside the US might not comprehend why every state has its own system, but that's at the very foundation of our system of government.

I'll never argue that resort fees, however, are anything but a deceptive cash-grab unless they're optional. As a conveniently priced package of services or amenities, sure - as something that's added to my bill without my approval, and which include things from which Ic cannot opt out, they're deceptive. Whether I choose to visit someplace that charges resort fees is very much a case by case decision, but it's absolutely part of my decision making process.

The article seems a little biased toward someone from outside the US, and I think if you remove that bias you can make a clear distinction between situations. Taxes can be confusing no matter where you go, if you're not from there. Yes, different countries have different taxation systems. Nearly everything else about our governments differs, too. But things like resort fees are uniformly unfair, when they're used. It is a shame that the US system of "consumer protection" allows them to persist, when in many other countries they are, or would be, outlawed.

But my dislike for hotel resort fees does NOT equate to a wish that my government-mandated taxes be cleverly disguised as part of something's actual price, which is what you're actually advocating for.

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