Hotel fees in Hilton Head: What do you actually have to pay?
We’ve all been there.
Excited to book a trip, future guests sometimes skip reading every last detail of their hotel bill before pressing “reserve.” But if you’ve booked a trip at a hotel on Hilton Head Island, it’s possible you missed a small charge on the price breakdown called a destination marketing fee. Some local hotels in Hilton Head, Bluffton and Beaufort charge guests for it. Others do not.
Depending on the hotel, the charge could be a flat rate per night, usually around $3, or a small percentage of the overall price. The charge is so small compared to the overall price of the room, it is often overlooked or assumed to be required.
The destination fee is different from a resort fee, which is usually required and covers things like pool access, parking and coffee. It is also different from statutory local and state accommodations taxes.
Destination fees are actually not mandatory for guests to pay, despite how they might appear on an invoice or bill. It is at the hotel’s discretion to remove the fee from the bill upon a guest’s request, and most do if asked, wrote Charlie Clark, Hilton Head Island-Bluffton Chamber of Commerce spokesperson.
When the fee was instituted, Robb Wells, president and CEO of Visit Beaufort, said that hotels were told to make it clear to staff that the destination fee was optional.
“Our stance is very clear — be upfront,” he said. “If you are going to have to waive it, waive it.”
The Federal Trade Commission oversees the fees, not state-specific agencies. In May, the FTC rolled out a new ruling on unfair and deceptive fees aimed to create more transparency in the purchasing process for hotel guests.
What are the fees used for?
Destination fees are not unique to Hilton Head, Beaufort, Bluffton or even South Carolina. They are used in tourist destinations nationwide.
In South Carolina, destination fees are used to collect money for tourism marketing. Some hotels choose to use the fees collected for their own personal marketing initiatives. Others partner with their local Destination Marketing Organization for destination-wide promotion efforts.
In South Carolina, DMOs have the ability to bring in more marketing money through a state match grant. For every $1 a chamber or visitors’ bureau raises in private funds, they can receive a $.50 match from the South Carolina Department of Parks, Recreation and Tourism.
DMOs must use the private and match funds only for destination specific marketing and public relations, according to the State Appropriations Act.
The department offers the state’s top five tourist destinations — those able to raise $500,000 or more in private funds — this grant funding to enhance their destination marketing efforts. “Emerging” destinations — smaller markets that generated at least $700,000 in accommodations tax funds in their last fiscal year — can apply using a different application.
In Columbia, hotel guests have the opportunity to pay the fee or opt out upon request, according to Experience Columbia, the city’s DMO. Columbia-based hotels that participate in the marketing program become “preferred partners” and receive “exclusive” benefits beyond the standard partnership services from the DMO, like enhanced visibility and promotion.
On Hilton Head, the situation is slightly different, according to Clark. Hotels that contribute dollars for the program have “no special designation” or “preferred benefits” from the Chamber by participating, she wrote. And it is of the discretion of the hotels as to where they pull marketing dollars from.
The program has been active on Hilton Head Island since 2007, according to Clark. In the most recent fiscal year, more than $2 million of the $4.96 million investment for the match grant came from hotel partnerships. Restaurants, airports, rental agencies, museums, and even non-profits are among the other fund sources.
It is still unclear whether the private funds from hotels have to come from a specific source. In Columbia, hotel contributions do not come from a hotel budget but just from destination fees. On Hilton Head, hotels decide for themselves which marketing dollars to invest, said Clark.
The rule that lays out the specification of the match grant program only states that the dollars from source funders have to be private and “new” meaning they have not been used before for tourism-related marketing, wrote Jayne Baker, spokesperson for the state department that conducts the match grant.
“We don’t know of anything that prescribes a specific source of the funds from a private contributor,” she said. “There is nothing in the Proviso or the Destination Specific guidelines to that effect. As far as we know, that would be at the discretion of the private contributor.”
Calls left with a number of hotels in the Hilton Head area who contributed funds to the Chamber were not returned to clarify if their contributions came from guest fees, their budgets or elsewhere.
Some hotels that contributed money to the Hilton Head chamber list the destination fee during check-out.
Beach House Hilton Head, Omni Hilton Head Oceanfront Resort, Sonesta Resort, the Sea Pines Resort and the Westin were among the many hotels that opted in to the program and listed destination fees during checkout. Other hotels that opted into the program did not list a destination fee during the online booking process.
In Beaufort, participating hotels do have some say in how the money is spent, but ultimately they’re bound by the state grant rules, said Wells.
Sometimes, Wells said, DMOs opt to not ask for a state grant match.
“They could find it’s easier for them to invest those dollars in ways they need to market a destination,” he said. “It could be they have a pretty significant piece of business.”
Who oversees the fees?
The state of South Carolina does not mandate, regulate or oversee destination fees, according to several state agencies. Instead, they are regulated by the FTC, said Scott Cooke, spokesperson for the South Carolina Department of Consumer Affairs.
The FTC’s ruling on unfair or deceptive fees went into effect in May, which is aimed to create transparency in the purchasing process for hotels and other short-term lodging.
The rule requires businesses to disclose the total price upfront, including all charges and fees, to display the all-in total without hiding it in the fine print, and to be truthful about all fees and charges, including avoiding vague phrasing like “convenience fees” and “service fees,” Cooke wrote in an email.
The ruling in its entirety prohibits misrepresenting mandatory fees as optional, but there is no mention of a ruling for the reverse.
Additional questions about the FTC’s oversight of these fees could not be answered due to the ongoing federal government shutdown.
