Introduction
For years, travelers have grown accustomed to the often-dreaded resort fee tacked onto their hotel bills. Traditionally, these fees are prevalent in vacation hotspots, where they cover amenities like pool access, fitness centers, or beach chairs. However, a new kind of fee is increasingly showing up on bills at city hotels, far from sandy beaches and poolside bars.
Many hotels have pioneered what they call an "urban experience fee" (among other names)—a mandatory charge that promises guests credits for dining, dry cleaning, internet access, and other services. But are these fees actually beneficial, or just another way for hotels to pad their bottom line? The opinions presented in the article are mine and are based on personal experience and a little math.
The "Urban Experience" Fee Explained
The concept of the "urban experience fee" is that guests are automatically charged a daily fee—anywhere from $15 to $35—during their stay. In return, they receive perks like dining credits, complimentary drinks, laundry service vouchers, or discounts on local experiences. This fee is not optional; it is automatically added to the nightly room rate. It can come under many names and can often be tacked on to your bill at check in, even if you have prepaid for your stay. You have to do some digging into some pretty fine print sometimes to discover if the hotel you are planning to stay at does this practice.
I have encountered this fee now twice in my travels with one of them being at the Swissotel in Chicago. There they charge an urban experience fee of $25 (plus taxes) per night. The other was at the IHG Wharf hotel in DC which charged $30 per night. In theory, this fee grants guests credits that can be used at the hotel’s restaurants or for services like dry cleaning. However, these credits come with restrictions—such as not being able to roll over unused credits from one day to the next—making it difficult for guests to extract full value.
In both cases I had prepaid the room so this was an add-on at arrival much like valet parking and in neither hotel did I utilize the full amount for the food and beverage credit. At the IHG I ate breakfast at the hotel one or two days at most and only once had dinner there. I wanted to dine at the numerous other restaurants along the Wharf area which is what it is known for. I never used any of the other offerings. Complimentary shoe shine once daily upon request as a perk? Seriously? Maybe business travelers would get some use out of that but I don't see that getting much traction.
Examples of Urban Fees Across Hotels
Here’s a look at a few more hotels that have adopted similar fees:
This luxury hotel adds a $35 nightly fee covering access to the fitness center, Wifi, 1 free movie per stay, PressReader, access to hotel bicycles (first come first served), local calling, all alongside a $10 dining credit Cirque Bar coffee shop. This credit will get you a pastry or a coffee as the prices there are $10 for pastry, $7-9 for coffee. So, I'd probably use the coffee every morning and might use the bicycle once. In theory I could rent a bike for unlimited use for $15/day through Lyft, or just do a couple of single use rides on the Lime scooters which would be less than $10/day. So would I be incentivized to use the bicycles at the hotel, I guess I'd have to in order to get some of the value back but I certainly am not getting $35/day worth and I really don't want to ride around hilly SF that much TYVM.
Charges a $42 daily resort fee that covers Wi-Fi and gym access (for 18+) but also gives unlimited local, domestic long distance (the 50 United States and DC) and toll-free calls; airline boarding pass printing; digital newspaper and magazine downloads through PressReader for duration of reservation; access to Paramount+ with SHOWTIME On Demand via in-room television. So, considering you are in Vegas and won't be in your room much, plus with your phone you can already access boarding passes, make calls, and likely stream then these fees are a write-off. If you are a Gold+ tier member in their rewards these fees can be waived as is the case with some other properties (Hilton, Marriott etc.) so make sure you take advantage of any perks you have with membership.
Hyatt Centric Times Square, New York:
Implements a $35 per day “destination fee” that includes a $15 in house laundry credit, $15 of valet parking daily, 10% Off Food and NA Beverage in Market One (after 11am which rules out the coffee and danish) and local discounts. As appealing as this might sound, most guests won't use valet or laundry services while there. Would you want to drive in Manhattan? Me either. Sightseers might take advantage of some of their discounts offered like the bus tours but very few would recoup the expenditure.
Do Guests Get Their Money’s Worth?
In theory, these fees offer benefits. However, the reality is often less rosy. Let's break down why:
Inadequate Credit Values:
The daily dining credits are typically not enough to cover a full meal or even a single entrée. For instance, a $15 food credit might not even cover a coffee and pastry for a couple, while an actual meal at the on-site restaurant could cost $30-$50 per person. This effectively means guests are incentivized (or rather, forced) to dine on-site at least one meal per day and pay the difference, boosting the hotel's restaurant revenue.
In addition, hotel restaurants, particularly those within major chains, often have higher price points compared to nearby independent eateries in large urban centers. While exact price differences can vary based on the city and specific establishments, it's common for hotel restaurant prices to be some 20-30% higher than those of local neighborhood restaurants. This estimate aligns with industry observations, noting that hotel dining venues often charge a premium for the added value they provide. Several factors contribute to this pricing disparity:
Operational Costs: Hotels typically incur higher expenses due to extended operating hours, comprehensive service offerings, and the need to maintain consistent quality standards.
Convenience and Ambiance: Dining within the hotel offers guests unparalleled convenience and a curated atmosphere, which is often reflected in the pricing. Room service cost is particularly subject to this convenience fee.
Brand Standards: Hotel chains adhere to stringent brand guidelines, ensuring uniformity in service and cuisine across locations, which can lead to increased costs.
Culinary Expertise: Many hotel restaurants collaborate with renowned chefs or offer specialized menus, adding to the overall dining experience and, consequently, the price. Having these specialized menus may make for a nice experience one night but to have to eat at the same place every night can be tedious. This is especially true of diners who have specific dietary restrictions such as vegan or gluten free as these diners may find they are limited to one option on the menu.
Image by Author Non-Cumulative Credits:
Many hotels impose restrictions on how the credits are used. For instance, credits often expire daily and cannot be combined across multiple days. A guest staying for three nights cannot save up their daily $15 credit for a $45 meal on the last day. This makes it challenging for travelers to fully utilize the perks, particularly if they plan to explore the city rather than spend time at the hotel.
Services Guests Don’t Need:
Perks like dry-cleaning credits, shoe shines, wellness discounts, or complimentary local experiences may sound appealing, but they often go unused. Most travelers do not need dry cleaning for a short stay, and wellness treatments might not be high on the list when visiting a new city.
Crunching the Numbers: Return on Investment
Let’s consider the likelihood of a guest recouping the cost of these fees.
Example Calculation for my 3-Night Stay for one guest:
Urban experience fee: $25 per night x 3 nights = $75
Daily food credit: $15 per day x 3 days = $45
Let's say my single meal at the hotel restaurant costs $35, I would pay $20 out-of-pocket per meal, thus spending an additional $60 (on top of the $75 urban fee).
In effect, the $75 fee ends up costing $135 total ($75 fee + $60 extra for meals).
In this example, I actually lose money, especially since I don't fully utilize all, or indeed any, of the other perks. Even with optimal usage of credits, the return on investment is rarely 100%, and many guests end up spending more than anticipated. I will note here that the Swissotel did offer an additional $10 daily credit for those guests who decline to have the room serviced during their stay as a means of reducing environmental impact so by doing so you could reduce the added cost to $105 ($75 + (3 x $10)).
Are There Any Jurisdictions Where These Fees Are Prohibited?
Currently, there is no blanket ban in the United States on these types of fees. However, some states, like California and New York, have consumer protection laws requiring hotels to disclose all mandatory fees upfront. The Federal Trade Commission (FTC) has also signaled interest in addressing deceptive pricing practices, which could potentially impact how these fees are advertised in the future.
In Canada, provincial regulations on hotel fees are more stringent in places like British Columbia and Ontario, where consumer advocacy groups have pressured for more transparent pricing. That being said, I have been researching the phenomenon in Canada and it seems hotels that once charged this type of fee (like the Royal York Fairmont in Toronto) are no longer doing so but in Niagara Falls there are many hotels that add mandatory fees (~11.5%) for various reasons such as hotel marketing and development fee, and Municipal Accommodation Tax (MAT) which does not include regular tax. The difference here though is that these fees are made clear upfront for the most part. Restaurants there may be another story...
In Europe the process is illegal and all fees and taxes must be mode known to the guest at time of booking. That does not mean you won't get dinged for fees by the hotels there (I know first hand that resort fees in the luxury hotels in Türkiye are not cheap but thankfully they were waived as I had a high enough status with the chain). What it just means is that the fee won't be tacked on after you arrive and required to be clearly in the upfront cost.
Conclusion
The bottom line: Always read the fine print and factor in these hidden costs when booking your next stay. If in doubt, contact the hotel directly to ask if they have any fees that are not represented in your booking total. The best way to avoid these fees is to simply choose hotels that don’t charge them or look for alternatives on platforms like rentals on Booking.com where such fees are less common.
While the concept of an "urban experience fee" may sound like an attractive value-add, in practice, it’s often a clever way for hotels to generate additional revenue. The credits offered rarely cover the cost of even a modest meal or service, meaning guests are left with little choice but to spend more at the hotel to recoup their "investment."
Tips for Travelers
Ask Questions: Before booking, inquire if the hotel charges any mandatory fees and what exactly they cover.
Plan Strategically: If you must stay at a hotel with these fees, try to maximize your credits by using them on higher-priced items or services you were already planning to purchase.
Consider Alternatives: If you’re not interested in or unlikely to use the perks, look for hotels that do not charge these fees or explore vacation rental platforms.
Maximize your Rewards: Stay at hotels where you have rewards programs that might waive or offset these fees with other perks and credits. Make sure to charge any meals you have in the hotel to our room to ensure you get the meal credit and of course the bonus points.
Read Your Hotel Bill Before You Leave: Mistakes can be made and credits can be forgotten. I've had several charges removed after going over my bill at the front desk from things like food credits missed, to valet charges when I self parked.
Hidden fees may be the new norm, but with some savvy planning, you can avoid falling into the trap of paying more for less.
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