President Joe Biden has set his sites on the hidden fees that resorts and hotels tack on to their advertised rates. That puts the Las Vegas Strip casino resorts squarely in the president's crosshairs because Caesars Entertainment (CZR), MGM Resorts International (MGM), and other operators charge sometimes hefty resort fees.
In many ways, the issue is not that Las Vegas's resorts charge fees, which are meant to cover the cost of amenities like WiFi, pools, and gyms. Instead, it's how these fees are presented to consumers.
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Biden has two issues with the fees hotels levy on top of their advertised prices.
First, he charges that some properties that aren't actually resorts are tacking on added fees. That's certainly not the case along the Las Vegas Strip since it's impossible to regard the massive, amenity-packed properties operated by Caesars, MGM, Wynn Resorts (WYNN), and other major players as anything but resorts.
It's the second part of Biden's crackdown -- when resort fees are shared with consumers -- that affects Las Vegas Strip resort operators.
The American Gaming Association, which counts Strip operators MGM, Caesars, Wynn and the new owner of The Mirage, Seminole Hard Rock Gaming, as members, takes issue with the president's planned crackdown.
"The AGA contends that fees charged by our members are neither hidden nor without value, and therefore should be excluded from any future rulemaking by the” Federal Trade Commission, the trade group's chief executive, Bill Miller, wrote to the FTC earlier this month, Casino.org reported.
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Are Las Vegas Resort Fees Hidden?
Biden's comments on the FTC's crackdown on hidden fees, which he made in late October, are quite clear.
"Last week, the Federal Trade Commission started work on a rule to crack down on unfair and deceptive fees across all industries, fees that were never disclosed -- never disclosed. And there was no way to avoid the fee, like processing fees for concert tickets or like resort fees," the president said.
"When you think you’re paying one price to book a hotel, you only find out after checking out that there’s a 'resort fee' you never heard about that’s added to your bill."
Las Vegas resorts -- at least the ones operated by Caesars and MGM, which combined control the majority of properties on the Strip -- fall in the middle of what Biden is talking about. It's fair to say that you can't avoid them. Neither Caesars nor MGM lets customers opt out of resort fees in exchange for not using those amenities, and they do disclose the fees well before checkout.
What they don't exactly do is tell you about the fees in the up-front advertised prices. Instead, both companies (and most Las Vegas operators) advertise a room rate and when you go to actually book the room, they disclose the nightly resort fee along with taxes.
That should be enough, argues the AGA.
Gaming Trade Association Fights Biden
Certainly, some hotels that aren't resorts charge resort fees, and some actual resorts don't disclose the added fees until checkout. That, however, is not what's happening in Las Vegas.
"Resort fees at our members’ properties are charged for services that provide substantial value to customers, enhance the quality of their stay, and distinguish resorts from standard lodging offerings,” Miller wrote.
“These additional services and amenities make for an elevated travel experience, with an attention to detail valued by guests.”
Miller argues that Las Vegas's resorts do disclose their resort fees before consumers book a room and that should suffice.
“With clear disclosures, consumers are armed to make their own choice about their traveling priorities -- many hotels don’t charge resort fees and in fact market that they don’t. Additional regulation could disadvantage resorts if consumers would be unaware of the amenities at one property over the other,” Miller added.
