The St. Regis New York Added A “Destination Charge,” And I Sort Of Like It?

Earlier I wrote about how the Sheraton New York Times Square has introduced a new daily $25 destination fee. The Sheraton is following the trend, as an increasing number of city hotels are charging fees that were previously typically just charged by resorts. There are now dozens of New York City hotels with these fees, so this is quickly becoming the norm.

As it turns out, the Sheraton New York isn’t the only SPG property in New York adding a “destination charge,” as pointed out by Der Fliegende Amerikaner in the comments section of the previous post. As of February 1, 2018, the St. Regis New York has a daily $50 destination charge. While these charges are unfortunately becoming popular at New York City hotels, up until now they’ve mostly been mostly for mid-range hotels, and not luxury hotels. This is the first “true” luxury property in New York City that I know of to charge such a fee.

So, what does the St. Regis’ daily $50 destination charge include? A lot of stuff, actually (all of these benefits are daily, according to the person I just spoke to at the hotel):

  • 50 USD Food and Beverage Credit (available in all outlets)
  • 50 USD Laundry/Dry Cleaning Credit
  • 25 USD Fodera Hair Salon Credit
  • Free HSIA, Local, Long Distance and International calls (unlimited)
  • 2 Museum (MOMA or Met) tickets per day
  • 1,000 SPG points per day

Of course on principle I’m highly opposed to these fees, though I feel like the numbers work out quite well here. I value Starpoints at ~2.2 cents each, so you’re getting $22 worth of Starpoints per day, which lowers the real “out of pocket” on the destination charge to $28. For that you’re getting a daily $50 food & beverage credit, daily $50 laundry & dry cleaning credit, $25 daily hair salon credit, and more.

Of course the hotel assumes most guests won’t use these benefits at all, and that those who do are going to go over in terms of the spend. I would be surprised if a hair salon at the St. Regis New York has anything for $25.

However, for me a big part of staying at the St. Regis New York is enjoying the King Cole Bar for a pre-dinner drink. If you just consider the $50 food & beverage credit and nothing else, this benefit basically gets you that for ~$28, by my valuation. I’ll take nearly half off King Cole Bar drinks! That’s not even accounting for the value of the laundry credit, or the MOMA and Met tickets. While it’s not something I personally value, I’d also note that they’re even including international calling for free, which is rare.

I’m really opposed to these fees, but I feel like this one might almost be a net positive. Am I the only one who feels that way?

Comments

  1. Are all those really daily benefits and not once per stay? Do you have to use them daily or can you go all out one night if you are staying a few days?

  2. @ AdamH — I called and asked, and the front desk agent said that all the benefits were daily and couldn’t be accumulated over time.

  3. It might seem nice now, but what about when they start charging $75 next year and $100 the following year?

  4. I have trouble with these “fees”, as they can make comparison on aggregator sites more difficult.

    However, at least in this case the fee is clearly disclosed, and there appear to be ways to get good value for money out of it.

    I wouldn’t be surprised if part of the thought process here is to make the hotel more attractive to lower- and mid-tier business travelers, as it could allow them to use room service and other services at the hotel without them violating their company’s travel policies (or at least giving them some cover.) I don’t think this will work in the long run, as corporate travel departments will either pressure them to offer corporate discounts that offset it, or require employees to use the credit for meals in lieu of reimbursement or per diem.

  5. @lucky
    If it doesn’t accumulate, what the hell good is $25 a day at the hair salon? Like you said, there’s probably nothing that costs that little, and who visits a hair salon daily?

  6. Millions of new travellers added every year from Asia alone. Brand name hotels can introduce whatever fees they wish in cities such as NYC and still maintain enviable capacity rates, and they know it.

  7. Anything that is “mandatory” is disgusting. Oh, and NY hotels still expect people to tip, right?

  8. Why don’t they just include it in the room rate (and include the credits as standard room benefits), instead of explicitly breaking it out as a fee?

    I sort of understand down-market hotels like the Sheraton (or even Westin or W) breaking out the fee, since I bet those hotels are competing for more price-sensitive customers. For those staying at the St. Regis, though, I really don’t think $695 or $745 is all that big of a difference, yet when I see $695 + $50 destination fee, I feel like the hotel is nickel and diming me, which is the opposite of what I think the hotel wants.

  9. I don’t like it.

    Maybe I can force myself to eat at the hotel. I don’t want to carry dirty laundry on a trip to use the benefit. Should I call someone in Nigeria just to make it worthwhile? Or maybe call a French telephone number for American Airlines? Or go to the MOMA every day?

    No, this fee is a little less bad than the Sheraton New York Times Square in that there a little more that can be used, but I don’t like it.

  10. Hmm, do you have a team of 999 people monitor this section? I just tried to link more information on the resort fee and how you should tell your reader more about this info. Here goes no link version

    NEW YORK CITY HAS UNIQUE ISSUES RELATED TO RESORT FEES.

    1) New York City loses over $24,181.96 per day because of hotels cheating NYC Hotel Occupancy taxes due to resort fee taxation issues

    2) Hotel resort fees drive NYC tourists to home shares like Airbnb

    3) Resort Fees in NYC went from 15 to 42 hotels in a year (May 2016 to May 2017). NYC currently (January 2018) has 72 hotels with deceptive resort fees.

    4) Resort fees are turning off international (and domestic!) tourists from New York City due to this hotel scam

    5) Hotel resort fees are hurting the housekeepers of NYC who receive less tips when the guests think the “facility fee” or “amenity fee” pays for their service. Housekeepers get $0 from a resort fee, all of the money goes to the hotel.

    Anyway, keep deleting it

  11. Nice try spinning this, but the fee is still abhorrent on so many levels. I don’t want to be forced to eat at an already overpriced hotel bar or restaurant just to get “value” from the fee. And good luck getting a meal at the St. Regis for anything close to $50, especially if you aren’t traveling alone. Frankly the credit is a joke if I’m buying a meal for my family of 3.

    The biggest thing, though, is this is still nothing but a sham to make the hotel look cheaper than it really is on search engines. There’s nothing positive about this. I’ve possibly got a 4-night trip coming up to NYC this summer. You can be guaranteed that the St. Regis, and every other hotel that charges one of these phony fees, is going to be getting a tweet that they lost my business because of their choice. Not that they’re going to care, mind you.

  12. @Garry Margolis

    Next month the Met is introducing a $25 mandatory entrance fee for those without New York state ID. However, many museums operate on the “suggested donation” fee model, and you are generally expected to buy a ticket unless you can’t afford it. Yeah, there are always freeloaders who refuse to pay, but it’s something more than just a suggestion.

  13. BS.
    For now it is possible to extract +$50 value, but pretty soon (once they have established the principle) you will see the benefits ‘enhanced’ to where it is just $50 or less credit for the over-priced bar/restaurant. But then it will be too late.
    I would cut them no slack on this. No to Resort fees

  14. Actually I don’t even get the concept. I stay at a place, and I pay for that; that’s it. But the thing is, these few hotels in NY doing it don’t make this the “new normal”; once that happens, it’s just a hidden price increase like tax (which to not show included on the price label is illegal in the EU because of consumer protection, and I agree with that). Meanwhile, as St. Regis loyalty or even preference is beyond me, it narrows down my choice rather nicely – to those hotels which are more decent.

  15. Hotels should not be allowed to separate these “fees”. 1, its like false marketing.

    Its like u can put the lowest base fees and add a hefty “destination charge” fee (or some other silly name fee). This allows the hotel to show up as the cheapest rate when they are not.

    (What is stopping the hotel from advertising a $10 base rate and a $300 destination fee?)

    Its ridiculous. And there is no rule that they must offer equivalent value in credits. (or they can simply limit the credit redemption in some special menu where the prices are grossly mark up)

    I almost cannot believe such gimmick could tempt Lucky. Probably too much Krug 2004? :p

    This must be stopped. If i could, i will would avoid such hotels.

  16. if you’re crazy enough to pay $700/night for a hotel room I suppose an extra $50 isn’t going to matter to you so much

  17. These greedy hotels will soon catch the attention of regulators who will shut down the absurd practice of mandatory additional fees on top of the room fee. I hope.

  18. Cities must love these fees to boot as they end up getting the taxes twice as they charge you sales taxes in the restaurant and it still counts as an occupancy fee so they tack on the occupancy taxes.

    Resorts fees or destination fees or whatever term they want to come up with next are nothing but deceptive and scummy business practices by the hotels. And to be fair in the blame here, I think AirBnB is just as deceptive with their cleaning fees while trying to display lower nightly prices.

    How many more years did they renew your SPG Amex Stars membership for before you wrote this article?

  19. One more reason not to go to New York. $695 for a room. Plus tax I am sure. Plus “tips” because you guys are so insanely crazy about those. Plus $50 for “destination charge”.

    Yea. Hahahaha.

    Besides corporate traffic (i.e. you HAVE to go there) I really don’t know why people would bother. Back in the day Europeans flew there for “shopping”. Not much shopping money left if you stay two meagre nights…

  20. Well… it’s a sneaky way of increasing the daily rate (immoral?). If it’s mandatory, why don’t they charge it in their daily rate? We know the answer- comparison sites…

  21. And to bring up the tipping … again. Obviously the $50 credit here and there is to incentivize people to use the hotels services, probably hoping that you will actually spend a bit more than $50 credit so you have to pay a few dollars of extra profit. The fact that they cannot be accummulated shows that they’re pretty useless. You may put in underpants and two socks a day, and tip $5 per day for pickup/drop off of the landry, while if you could accummulate the 5 underpants and 10 socks, you’d probably also tip $5 for the one-day pick up…
    But really, if the $50 credit cannot be used for tipping (which I assume it cannot), it’s actually a HUGE benefit for the hotel. Their products already include a substantial margin, and since you pay extra for the employee’s salary (as the tip), the hotel benefits twice. I see it as a way the hotels cope with the extra salary demand of employees, letting the customers pay for it, and increase the use of their in-house services, hence increasing efficient use of staff…

  22. And BTW… The room rate is not 700 USD. It’s 700 USD plus taxes. I really don’t understand why it’s not obligatory to show rates including taxes in the USA, just like you see in fuel stations and (supposedly) flights.

  23. I would actively go out of my way to avoid a property charging a destination fee. There is no positive about a property charging extra in this fashion. Raise your nightly rate if you’re wanting to charge more. This is a bad way for hotels to charge people for nothing.

  24. I’m afraid I have to disagree, Ben. If one could opt into the $50/day fee to get those benefits, great. But when I’m already paying $695 per night, I don’t really feel it’s reasonable to have to pay another $50 whether I want to or not. Then make the night rate $745 if that’s what you want. As others have said, what if next year, the fee goes to $75 or $100 because they realize people are actually using the benefits. This is getting out of hand.

  25. I recently stayed at the W Time Square and they also charge a $25 destination fee. While I don’t like the idea either, it’s easily recouped by a drink or two at the Living Room Bar once a day. Seems like this is for all SPG properties..

  26. I actually “get” the fees that airlines are charging to an extent. They are just unbundling the flying experience. Fees for things that you probably wouldn’t use like what these hotels are doing? Bogus. How about offer it as an attractive “package deal” option. For $25 you get free Internet (bogus I know), fitness access, free phone and $15 credit in restaurant, etc. My advice is to collectively leave negative reviews on hotels that charge a fee. Same for places that charge $14.95 for Internet access.

    Fees are all over Las Vegas. That just gave me another excuse to pass on that city as much as possible. NYC will be tougher to avoid though better for my wallet if I pass.

    I’d love to see a hotel chain and its operators market themselves as a no resort fee hotel chain. Ironically, it will probably be Motel 6 and the like to do that.

  27. I see it almost like booking through Virtuoso. Often you can get a lower (pre-pay or discounted) rate directly through the hotel, but booking Virtuoso gets you more benefits than the price difference.

    This issue with this (or resort fees) are the times where I just need a nice (albeit luxury) place to sleep, and then head to meetings the next day. I don’t have time to use the benefits, but I don’t have a choice and the money is lost. It’s paying a premium when I don’t always need it.

  28. Unless I had just won the lottery I cannot imagine ever paying that much for a room. A $50 fee is a moot point. Seriously, if this is how the hotels are trying to compete with Airbnb they’re doomed.

  29. The room costs $700, and they’re adding a $50 fee on top of it? Sure, the $50 credit looks good on paper, but as others have pointed out, at a hotel with this price point, that gets you nothing- you’d end up spending more than you’d get. It’s actually ridiculous that a hotel already this expensive is nickel and diming customers when a Holiday Inn Express gives you free wifi and breakfast.

    Hotels often offer options for packages that include a dining credit and such, and I sometimes purchase those when they offer a value to me – i.e. when I see myself using the hotel restaurant or room service. If that’s what I want, I’ll buy that package – no need to shove the fee down my throat and convince me there’s value to it when I’m on a business trip and don’t have time to sit around in the hotel lounge drinking cocktails.

  30. So I guess I am in the minority in agreeing with you that In This Case the benefits are more valuable to me than the fee. (We also consider drinks in the bar as an integral part of our experience & value Starpoints similarly)

    I do wonder though if they can include the fee on reservations that were made prior to the time they began disclosing this. We have an upcoming points reservation next month & will be curious to see if they charge it.

  31. Ludicrous. The next step will be a bed fee of usd 20 to ensure your room has a bed. Resort fees at island / out of the way properties are understandable. Not at city hotels.

  32. One way to look at it.

    Or “I would like $25 off the $30 manicure”

    That sounds like a decent discount. I plan to use the $50 F&B credit each day – and the salon & dry clean credit at least once. With the Starpoint bonus it’s a win-win for me. (In this particular instance)

    However I detest add on fees and believe they should be outlawed. It’s a terrible trend IMHO and I suspect these benes will be reduced in the future.

  33. While I disagree with both resort and destination fees. I find a destination fee for each night you stay at the property as egregious. Charge it once and let that be it. And honestly I feel the same for a resort fee also. If you’re trying to give value to your guests then make it appear you are actually giving value as opposed to just raising the prices. These items are not something you would use each day for your entire stay.

  34. Lucky Strikes Out

    (Badly…. alas. However well-meaning, stretched, even thinking-outside-the-box your disposition when you crafted this post, it ends up being one of your worst, most widely ridiculed posts ever….. Shocking indeed as Doc dubbed it)

  35. Really Lucky??!? You tweeted furiously against this last year in your “urban destination” post. These should be chastised, not glorified. Check out DoC’s post on this topic and the fury brewing over OMAAT.

  36. I like the idea if it stays at $50 per night as I frequent the St. Regis New York often and I am a guest who utilizes all the services at the hotel including dry cleaning, daily pressings, hotel dining.

    However, I do agree that if this rises to $75 or $100 per night then it becomes less beneficial to the guest. I am assume the destination charges are trying to motivate clients to increase spend while staying at the property.

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