a tangle with resort fees and hotel taxes

Maybe I should take my tax preparer to Palm Springs for the weekend. Not because my tax preparer needs the rest, but because the way things are going, consumers like me will soon need an expert just to understand who’s really charging us what.

I’m talking about resort fees and hotel taxes. Those are issues in plenty of lodgings beyond Palm Springs, especially in Arizona. But Palm Springs is where I happened to be a week ago.

I’d booked a room at the Saguaro Hotel in Palm Springs, a colorful revival of a former Holiday Inn on East Palm Canyon Drive. The hotel, managed by San Francisco-based Joie de Vivre, opened in February. With an auto club discount, I managed to get a rate of $116.10. Pretty good, right?

Then when the reservation-confirming email came, I saw the hotel’s line-by-line breakdown of a bill exceeding $150, including an added $37.24 in “local taxes.”

What? More than 30%? Most major U.S. cities charge between 9% and 19%. This sounded like the highest room tax I’d ever seen in North America. I was ready to complain to any Palm Springs city official who would listen.

Good thing I didn’t. As I soon found on the city’s website, the city of Palm Springs assesses hotel taxes (officially, “transit occupancy taxes”) of 13.5% for larger “group meeting” hotels and 11.5% for all other hotels. County and state taxes add about 2%. There are plenty of places with higher hotel taxes than that.

So where was my money going? The undisclosed key ingredient in the Saguaro’s “local taxes” total was actually the hotel’s mandatory $18 daily “resort fee,” which has nothing to do with the government.

Resort fees are a way for hoteliers to boost revenue while still advertising lower rates. The practice goes back many years in Arizona, and now many hotels in and near Palm Springs charge these mandatory fees too.

When I rechecked the hotel’s original confirmation email, I saw that the Saguaro’s resort fee was mentioned -- not alongside my nightly rate but down below, near the pet policy.

Now, before I tell you about my conversation with the general manager, let me say I drove out to the desert, stayed at the Saguaro and had a fine time. When I checked out, the Saguaro’s “folio” paperwork mentioned the resort fee more prominently.

But again it combined the fee with taxes, this time alongside the line item “resort fee & tax.”

So I called David Curell, the Saguaro’s general manager. He looked into the details and apologized. The hotel’s reservations paperwork template was flawed, he said, and “we’ll definitely get that resolved and corrected” so that reservations will properly list resort fees.

As for the folios guests receive on check-out, Curell acknowledged that those aren’t ideal, either. He said staffers are “still in development” working on a way to list taxes separately that will also allow Saguaro’s software to mesh with various booking channels such as Expedia. Until then, he said, some taxes will be lumped together with the resort fee, and labeled as such. “In an ideal world, everything would be broken down” Curell said.

Next time you’re comparing hotels before making a booking, be sure to include the resort fee, if there is one. And when you get a billing statement, have a close look at how taxes and resort fees (if any) are listed.  

The night after my Saguaro stay, I moved to the Riviera Hotel, at the other end of Palm Springs, for the sake of variety. The Riviera’s resort fee is a $28, but its bill was straightforward: “Resort charge $28,” it said, followed by separate lines for city, county and state tourism taxes. I can’t say I was happy about that, but at least it was clear.

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