Imagine booking a Chicago hotel room for just $5 a night! Sounds incredible, right? But hold on, because there's a catch that's leaving travelers feeling ripped off: a whopping $125 'resort fee' tacked onto that unbelievably low rate. We're all familiar with hotels trying to boost revenue with destination or resort fees, and Las Vegas is notorious for this. But this situation in Chicago takes the cake, pushing the boundaries of what's considered acceptable, and it was first brought to light by View from the Wing.
Let's delve into the curious case of The Chicago Hotel Collection. This group comprises four independently operated hotels within the city. At first glance, their website might lead you to believe they're overflowing with awards. However, a closer look reveals they're simply highlighting Chicago's recognition as the best big city in the U.S. for nine consecutive years. It's a clever marketing tactic, but slightly misleading.
But the real head-turner is their pricing strategy. Each hotel advertises incredibly low base rates, only to ambush you with sky-high 'resort fees.' Now, some properties call them 'resort fees,' while others euphemistically label them an 'all-inclusive package' – which isn't truly all-inclusive, by the way. And this is the part most people miss: these fees can dwarf the original room rate, making the initial bargain a complete illusion.
Take the River North property, for example. You might spot a tempting $16 per night rate on their calendar. Enticing, isn't it? But click through, and you'll discover the actual minimum rate is $120.11, which incorporates a hefty $104.95 nightly resort fee. What exactly does this fee cover? Supposedly, it includes two complimentary cocktails each night, a $10 nightly dinner credit, and vague "exclusive local and worldwide perks." How generous!
Interestingly, the River North property is an exception, showing the base rate in the calendar. The other three properties display rates inclusive of all mandatory fees from the outset. Consider the Gold Coast location, where the calendar shows a minimum rate of $143. When you click through, you might find a rate as low as $130, which already includes the $125 nightly resort fee. This fee gets you a complimentary breakfast buffet for two, two complimentary cocktails each night, a $10 nightly dinner credit, gym access, and more.
So, what's driving this unusual pricing model? Why the artificially low room rates coupled with exorbitant resort fees? There are two primary explanations, and here's where it gets controversial...
One theory is that these hotels are deliberately trying to deceive customers, luring them in with attractive rates only to inflate the price later with mandatory fees. Personally, I don't believe this is their main objective. While one hotel briefly shows the pre-fee cost in the calendar, it seems more like an oversight than a deliberate strategy. Hotels ideally should display all-inclusive rates from the start, a detail the company should rectify for consistency.
I believe a more plausible explanation lies in the realm of online travel agencies (OTAs). These properties likely rely heavily on OTAs for bookings due to their limited brand recognition. OTAs charge substantial commissions, but these commissions are calculated based on the base room rate, not the resort fee. So, if a hotel must surrender 10-30% of the room rate to a third party, they'd rather it be from a $5 rate than a $130 one. It's a clever way to minimize commission costs, even if it feels a bit underhanded to the consumer. 😉
While complimentary breakfast is a nice perk, it's common in many limited-service hotels. The other perks seem designed to encourage further spending. A $10 dinner credit barely covers a meal, incentivizing guests to visit the restaurant. And while you can theoretically enjoy your free cocktail, many will likely order a second or pair it with food, thus increasing their bill. This strategy is even more aggressive than what you typically encounter in Las Vegas, making it a rather peculiar approach for this hotel collection.
Bottom Line: The Chicago Hotel Collection, a group of four independent hotels in Chicago, shares a common trait: extremely low room rates coupled with substantial resort fees. We're talking about $5 room rates ballooning to $130 with the addition of resort fees. This pricing model is unprecedented and surpasses even the tactics employed in Las Vegas.
The primary motivation is likely to minimize commissions paid to online travel agencies (since commissions are based on the room rate, excluding resort fees), but it's hard to say for sure...
What are your thoughts on these unusual hotel rates? Do you think this practice is deceptive, or simply a clever business tactic? Have you encountered similar situations in your own travels? Share your experiences and opinions in the comments below! Is it fair to blame the hotels, or should the OTAs be more transparent about their commission structures?
