National Consumers League

What's wrong with hotel resort fees?


Brian YoungThe following scenario is all too familiar to consumers when they are shopping around for the best hotel deal. You begin your search as many consumers do, by logging onto your favorite hotel booking site to find a hotel in a great location at an affordable price. After a little research, you settle on the perfect hotel that is near the action, but far enough away that it fits into your budget. 

As you near completion for your hotel booking however, you notice that the overall cost of your room is nearly twice the amount of the room rate you were quoted. This is because your hotel levied a mandatory resort amenity fee against you that you had to pay regardless of whether you use any of the amenities! You are now faced with the all too common choice between taking the financial hit and paying the hidden fee, or starting over from square one to find an affordable hotel (that hopefully doesn’t charge the fees).

Unfortunately, the trend toward mandatory hotel resort fees seems to be growing. During my own research for a hotel in Las Vegas, I saw several hotels artificially deflating their prices by neglecting to advertise their room rates along with their mandatory fees. One can only assume that this was done in order to lure consumers into selecting their hotels over the more honestly marketed prices that advertised the actual cost of a stay.

This practice is extremely profitable for the hotel and resort industry. In 2015, the industry garnered $2.47 billion from this practice. Unfortunately, while this trend may be very profitable for the industry, it is inherently deceptive and harmful to consumers who are slammed with hidden and fees for “amenities” they may not even wish to use.  Furthermore, these fees tend to cover amenities that were historically included in the price of the room such as local calling from their hotel room, beach towels, access to the pool or gym and discounted access to the hotel’s amusement park.

For consumers, this creates a race to the bottom where ethical actors -- hotels and resorts that publish the actual cost to stay at their hotels -- are disadvantaged since cost-conscious consumers are naturally drawn to the the least expensive prices. Unfortunately, travelers often find that their nightly rate increases dramatically once the resort or hotel comes clean about the mandatory fees.

Fortunately, the Federal Trade Commission (FTC) offered guidance to the hotel industry back in 2012 that motivated them to be more upfront about the fees they charge. Until then, many hotels were tacking on numerous fees at check in or check out, once a consumer had far fewer -- or zero -- alternatives to paying the fees. Recently, however, the FTC has stated that it will continue to look into the practice of charging mandatory resort fees that are separate from the advertised room rate. The Commission has even signaled that it may take action to end this practice entirely.

Unfortunately FTC Chairwoman Edith Ramirez has taken some heat from Congress for the FTC’s efforts to address this issue. Just last week, the chairwoman was peppered with industry talking points by Senator Dean Heller (R-NV), who insinuated that consumers do not mind being charged these hidden and deceptive fees. Let's hope that the FTC will remain strong against such industry-led attacks and fight for honest and transparent pricing that will enable consumers to make informed choices and good actors will not be penalized for being honest about the costs of their rooms.