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Trick or treat? Resort credits demystified

Trick or treat? Resort credits demystified

In the latest craze in the race to the all-inclusive top, several large hotel and resort chains have introduced 'resort credits' to make their packages more attractive and, of course a cynic would say, to make more money from their guests.

But what exactly are resort credits and are they worth using? I delved into this tricky area to shed some light on the subject.

Resort credits are a relatively new addition to the all-inclusive landscape, offering guests in-resort discounts on things like services, upgrades and excursions, in addition to the usual inclusions such as buffet meals and drinks.

They will often come as part of the hotel package and have been a successful selling point for several big resort chains. It's part of a fast-growing trend framing resorts as destinations in their own right and taking the all-inclusive concept one step further. Apart from taking excursions, customers often have no need to leave the hotel grounds and the resort manages to scoop up any cash that guests might have spent elsewhere on attractions, food, services and gifts.

Since they were introduced, resort credits have caused some confusion amongst travellers. A quick flick through reviews on travel website Tripadvisor reveals that there are a few problems with the model: resort credits give the impression of offering something for nothing; discounts are often applied against overpriced services; and there are sometimes terms and conditions attached to them that prevent guests from using them freely.

Reports from travellers have been mixed, some call them a 'scam' and warn against using them, while others have said that using resort credits took the fuss out of organising their trip and helped them get more value out of their holiday.

Stiff competition

It's no surprise that this new fad seems to have taken hold in two glitzy and commercialised spots – Cancun in Mexico and Las Vegas in the USA – with a few exceptions springing up at the Four Seasons in Hawaii, and Como hotels in the Maldives, for instance. To keep things simple, I have chosen to focus on hotels in Mexico in this blog, comparing their resort credit offerings to see if they are worth using.

The big players on the Mexican Riviera offering resort credit packages include Hard Rock Hotels, Palace Resorts, Barcelo Hotels and Resorts and Hotels Paradisus. For these hotels, it started as a clever way to stand out amid the competition and allow customers to differentiate between similar all-inclusive hotels. But as more resorts begin to offer credit, the actual content of the package is becoming more important.

Hard Rock hotels, for instance, has upped the ante with a new "Limitless Resort Credit", identifying the fact that, in the past, guests have been dissatisfied with the limit placed on how many credits they could use towards a particular item.

Easy money?

Upon booking your hotel, resort credits are generally allocated per room according to the length of stay, which sometimes come in the form of vouchers to be redeemed against spa services, a la carte restaurant or special meals, premium wine, guest-room upgrades and even basic services like laundry and babysitting.

On the surface it sounds great, who doesn't appreciate a free spa treatment? But some resorts will only let you use a limited amount of credit towards a service, so, for instance, you may be able to use $50 of your credit towards a $100 spa treatment, which simply amounts to a 50% discount.

Others will apply a 'tax' at the end of your stay. So, for instance, if you spend $1,000 in resort credits at Hard Rock hotels in Cancun and the Dominican Republic, you will have to pay 20% in tax, or $200 when you check out.

Guests should be aware that these discounts are sometimes applied against seemingly over-inflated prices. For instance, guests at the Cozumel Palace in Cancun reported paying $150 resort credits for an upgraded bottle of white wine, which costs about $10 in the US. With the 11% tax that the resort was charging on credits, they ended up spending $16.50 of their own money for the wine – 65% more than they would have paid in an American supermarket.

At any resort, it's advisable to do the maths and decide for yourself. There are still bargains to be had. At Hard Rock Cancun, for instance, a swim with the dolphins at the "Wet 'n' Wild" waterpark costs $129 with resort credits, with 20% tax or $25.80 payable on check-out. Independently the same experience would cost tourists $115, so while the Hard Rock's price is slightly inflated, the actual saving to hotel guests is a not-inconsiderable $89.20.

Terms and conditions apply

A quick price comparison between a 7-night holiday to hotels in Mexico offering resort credits and those that do not reveals there is little difference in cost. The holiday price is often almost identical to resorts that do not offer credits so it seems like the customer is getting a better deal. Even if the benefits of booking a hotel with resort credits are limited, it's still worth doing.

However, there are some hotel chains, like the Occidental, that only offer resort credits as part of an upgraded package that will cost you more. If this is the case, it is advisable to look at the price difference and decide if there is any extra value to be had. If the credits come in the form of coupons for discounts on overpriced resort services ($35 off a $100 in-resort massage for instance) then you may be better off looking outside the resort for a better deal.

Palace Resorts is one of the larger hotel chains to colonise Mexico's Caribbean coast with numerous hotels in Cancun – the Moon and Sun Palace, Le Blanc Spa resorts, Beach Palace and Cozumel Palace. Here, resort credits replaced the old "palace passport" that sweetened hotel packages by offering free excursions and spa treatments. Now the chain offers guests $1,500 resort credits per room for a 5-8 night stay, with a 16% tax or "operational fee" payable at check-out.

Credit where credit's due

One guest at the Sun and Moon Palace found the resort credits very useful, allowing her to book excursions to swim with dolphins, visit the Wet 'n' Wild waterpark and see the Mayan ruins at Chichen Itza with the minimum of hassle. Even with the 16% tax, she was convinced that she got good value out of using her credits.

However, another traveller reported that his family were prevented from booking excursions using resort credits because they were "sold out", while he was limited to using $270 credit at the spa – the price of a couples' massage. This seems like a high price for a massage, but the 16% operational fee of $43.20 seems more like it. It's almost as if the prices are inflated to such a degree that the tax reflects the actual service cost, thus the hotel guest is simply paying the same as they would have paid at a local spa outside the hotel.

A couple who booked the Isla Mujeres Palace to use their resort credits on scuba diving were disappointed to find that they were only allowed to spend $300 credits towards diving, which was only enough for one two-tank dive trip at the resort. Most dive centres will charge around $75 for a similar trip.

Distinct from the other resorts, Hard Rock Hotels claims to have introduced the first "truly limitless" resort credit. Unfortunately that doesn't mean guests have a blank cheque to spend in the resort, but rather there's no cap on how many credits can be used towards a particular item or service so you can use all your credit on golf or the spa if you wish. There are no hidden charges, though guests should take note of the 20% service fee. The Hard Rock's resort credits are allocated per room according to length of stay, so guests get $1,500 for less than 7 nights, $1,800 for more than 7 nights and up to $2,500 for stays of more than 12 nights.

As with the other resorts, travellers can use the credits for dining, spa treatments and premium alcohol, as well as excursions and shopping, but it's advisable to use your head and check prices before booking or buying anything. In this case, the Premium Dolphin Swim works out as good value for money, but $120 in resort credits for the Chichen Itza trip seems steep compared to the same trip offered for $68 from Viator. Hard Rock's deal actually works out better than Viator's if you consider that it will actually cost 20% of the price or $24, but it doesn't change the fact that the prices have been hiked.

Coupons not credits

It's a similar story at Paradisus Hotels and Barcelo Hotels and Resorts, except that both offer resort credits in the form of discount vouchers. Melia Paradisus in Cancun and Playa del Carmen offers packages with $550 resort credits for 4-6 night stays, or $1,500 for 7 nights or more. The credits come in the form of savings coupons that can be redeemed against room upgrades, spa services, gifts, golf green fees, premium wine, food, or dinner. There is a limit on how much credit you can use towards each item, such as $20 coupons for spa treatments, but the upside is that you know how much you are spending upfront without a surprise bill for resort credit taxes at the end of your stay.

Barcelo Hotels also applies resort credits as discounts against services, upgrades and excursions. The amount of credit varies depending on the resort and the number of nights booked, but guests at the Barcelo Maya Beach get $2,000 in vouchers for stays of 5-11 nights that can be used for everything from room upgrades and activities to premium wine and fine dining.

Of course, discounts can save money, but not when the item is either unavailable or overpriced. Using resort credits is subject to availability and, as such, travellers have been refused room upgrades at check-in or places on excursions. Among the examples of discount vouchers deemed relatively redundant when used for inflated in-resort items include $50 off a $200 massage and a $10 voucher for a $40 bottle of wine at Barcelo Hotels – neither seem value for money if you compare them with typical high street prices.

There's little difference between the resort credit deals offered by these resorts in Mexico, so choosing one will be a matter of preference. It looks like there are more savings to be made at resorts offering credit with a tax payable at the end than at resorts that offer vouchers for services. Though Palace Resorts charges less tax on resort credits than Hard Rock hotels, the fact that Hard Rock hotels lets guests use their discount as they wish may swing travellers in its favour.

To sum up

Resort credits can help enhance your holiday if you use them wisely. Certainly don't look to spend them all on things you don't really want or you may well end up being stung with a hefty bill at the end of your stay. For instance, if you used all your $2,500 credits at the Hard Rock, you would be asked to pay 20% or $500 at the end of your stay. Most importantly, look carefully at the pricing for services before using your credits or coupons.

Don't let your guard down because you are on holiday, be canny. Book services from the hotel at check-in or in advance if possible, so you can use your credits exactly as you like. Remember there is a fee and only use your credits for things you really want to do: swimming with dolphins, for instance, is an once-in-a-lifetime experience that may well be worth the $25 (20% of $129 resort credit price) you will end up paying, regardless of the service mark-up. But $40 (20% of $200 photo shoot) for a few photos that could have been taken with a smart phone is usually not a shrewd way to spend your pennies.

Interested in the rise of resorts as holiday destinations in their own rights?

Read our article on resolving the ultra all-inclusive conundrum and look out for our upcoming blog on 'destination hotels'.

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Sasha Wood

Sasha Wood

Travel Muse

An assorted adventurer, nature lover, wildlife enthusiast, culture vulture, and beach buff - my...

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