Are mandatory resort fees about to disappear?

resort fees

Mandatory resort fees, which can surprise hotel guests by adding hundreds of dollars to the cost of their hotel stay, could soon disappear.

Two lawsuits by the state attorney generals in Washington D.C. and Nebraska, and a proposed Congressional bill, aim to kill the hated fees. And not a moment too soon.

The extra charges, also called “amenity fees” and “destination fees,” effectively hide a portion of a hotel room’s daily rate from consumers, according to a suit filed by the D.C. Attorney General against Marriott. Officials say the fees are deceptive and mislead consumers into thinking their hotel rooms are cheaper than they actually are, because the fees are not revealed until the end of the booking process.

The suit would prohibit the company from advertising daily hotel room rates that do not include mandatory resort fees. Separately, Nebraska’s AG has filed a suit against Hilton. In Congress, the The Hotel Advertising Transparency Act of 2019 would also limit a hotel’s ability to add surprise resort fees.

Experts say that if any of these efforts are successful, they would effectively end resort fees.

“Hopefully, this is the beginning of the end of resort fees,” says Lauren Wolfe, who runs Kill Resort Fees, an advocacy site dedicated to eliminating resort fees.

A Marriott spokesman said the company is in discussions with officials about the legality of its resort fees.

“We don’t comment on pending litigation,” said Brendan McManus. “But we look forward to continuing our discussions with other state attorney generals.”

How did mandatory resort fees become so hated?

Resort fees used to be rare, reserved for just a few high-end hotels. The fees generally covered amenities like beach chairs, pool towels, “free” Wi-Fi and use of an exercise room. But over the years, more properties began to adopt the fees — even if they were not resorts and offered fewer extras.

Hotels charge resort fees for several reasons. First, it makes their room rates appear to be less expensive than they are. Consumers often don’t see an “all in” price until they reach the final screen of their reservation, by which time they’ve already made a decision to book. But hotels also don’t have to pay travel agent commissions on the fees (although one online agency, Booking.com, recently notified hotels it would begin charging commissions on resort fees, other online agencies have not followed suit).

Last year, the number of hotels charging controversial resort fees grew by 14 percent, according to ResortFeeChecker.com, a site that tracks travel fees.

Randy Greencorn, the site’s publisher, said the average resort stood at around $21 per night but that charges were increasing “dramatically.”

Which state has the worst resort fees?

Florida has the highest number of cities with resort fees. The Sunshine State has the top two cities for resort fees and four in the top 10. Las Vegas, Honolulu, and New York also have high resort fees. The most dramatic growth of resort fees took place in the Big Apple, where the number of hotels doubled from the previous year.

Hotels claim that resort fees allow guests to have an all-inclusive experience during their stay. And while that’s technically true, it glosses over the fact that the fee often isn’t disclosed until almost the moment you pay for the hotel stay online or by phone. And, guests rarely have a choice about paying the fees. Not using the pool or exercise equipment doesn’t mean the resort fee is removed from your bill. And that, say many guests, is wrong.

“This is a clear case of false advertising,” says Charles Leocha, president of Travelers United, a consumer advocacy organization. “My biggest surprise is that it has taken so long. If Marriott settles this sooner rather than later it will be a big win for consumers.”

The law catches up to mandatory resort fees

The attorney general’s suit is the culmination of years of investigation by regulators.

The DC attorney general charges that for at least the last decade, Marriott has used an unlawful trade practice called “drip pricing” in advertising its hotel rooms to hide a portion of a hotel room’s daily rate from consumers.

“Marriott’s motive in continuing this deceptive practice is pure profit,” the suit alleges. “It has reaped hundreds of millions of dollars over the last decade from this deceptive [pricing].”

Here are the key complaints

✓ Marriott charges mandatory resort fees, which can amount to as much as $95 a day, to increase revenues without appearing to raise the room rate at its hotels.

✓ That Marriott has continued this practice because it has become a key profit center for the company. It has reaped “hundreds of millions of dollars” from expanding its use of resort fees over the past decade.

✓ Marriott’s resort fee policies forbid hotels it owns, manages or franchises from charging resort fees unless the property submits a formal request to charge the fees and obtains Marriott’s approval to charge the fees.
But officials signaled their displeasure with resort fees as early as 2012, when the Federal Trade Commission warned 22 hotel operators that their online reservation sites might violate the law by providing a deceptively low estimate of what consumers can expect to pay for their hotel rooms.

Specifically, the FTC warned Marriott that mandatory fees hotels charge for amenities such as newspapers, use of onsite exercise or pool facilities, or internet access, could be illegal if consumers did not receive advance notice of them.

Consumers deserve to know

“Consumers are entitled to know in advance the total cost of their hotel stays,” FTC Chairman Jon Leibowitz said at the time. “So-called drip pricing charges, sometimes portrayed as convenience or service fees, are anything but convenient, and businesses that hide them are doing a huge disservice to American consumers.”

Although the FTC concluded that resort fees were harmful to consumers, it stopped short of requiring hotels to include resort fees in their hotel rates, saying they lacked the legal authority.

That kicked the matter back to the states. The attorneys general of all 50 states launched an investigation into the pricing practices of the hotel industry, which ultimately led to the DC Attorney General filing its lawsuit this week.

What will happen next to mandatory resort fees?

To call resort fees the most hated travel fees is no exaggeration. As a consumer advocate specializing in travel cases, I receive almost daily complaints about them.

Terry Shofner, a retired engineer from Bridgeton, Mo., recently stayed at a hotel in Excelsior Springs. “It was hardly a resort,” he says, “But it charged a $15 a day resort fee.”

Although he grudgingly paid, other guests fight the charges — often successfully. Del Levy recently stayed at a casino hotel in Vancouver, Wash. It charged a $21 a night resort fee.

“I refused to pay it because there was no resort — only a casino,” she says. “They relented.”

Why haven’t hotels backed down? Some have, to a point. A few Las Vegas resorts have launched marketing campaigns in recent months offering rooms without resort fees. They include the SLS Las Vegas, Golden Nugget and Red Rock Resort. But the fees haven’t disappeared because too many guests pay them without question. That gives hotels a green light to continue charging them.

A chilling effect for new fees

Even if this lawsuit drags out in court, it puts hotels on notice, says Wolfe.

“This lawsuit should make any hotel charging resort fees in America scared,” she says. “Any other attorney general could bring a similar lawsuit. This complaint is not just talking about ending the practice, but injunctive relief and civil penalties. That’s potentially hundreds of millions of dollars the hotels would have to pay.”

In the meantime, Leocha of Travelers United says guests have to pay attention to the quoted room rate.

“Consumers need to read the final prices very carefully when they’re booking a room,” he says. “And when attempting to comparison shop for hotels they must realize that the published prices are misleading many times.”

Posted in Smart Consumer Tagged , , , , ,

Christopher Elliott is the founder of Elliott Advocacy, a 501(c)(3) nonprofit organization that empowers consumers to solve their problems and helps those who can’t. He’s the author of numerous books on consumer advocacy and writes weekly columns for King Features Syndicate, USA Today, and the Washington Post. If you have a consumer problem you can’t solve, contact him directly through his advocacy website. You can also follow him on Twitter, Facebook, and LinkedIn, or sign up for his daily newsletter.

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