Reconsidering resort fees: Exploring their positive signaling value in hotel pricing strategies

Abstract

Resort fees, mandatory charges added to hotel room prices, remain prevalent despite consumer aversion and regulatory scrutiny. This paper explores the potential positive signaling value of resort fees, proposing that they indicate a hotel’s confidence in its amenities and services, thus signaling quality to potential guests. While resort fees often generate initial dissatisfaction due to opacity in disclosure, this study explores their potential as signals of hotel quality and confidence, provided hotels disclose fees early and link them explicitly to high-value amenities. Employing a netnographic analysis of the FlyerTalk online travel community, we identify both customer-related (e.g., prior experience, loyalty program membership) and firm-related factors (e.g., transparency of fee disclosure, geographic location) that moderate this signaling effect. Our findings challenge prevailing perceptions of resort fees as solely negative, offering insights for industry practitioners on leveraging resort fees strategically to enhance customer perceptions and satisfaction.