FTC Warns Hotels That Hiding Resort Fees May Violate The Law

Have you ever booked a hotel room and then arrived to find that in addition to the room rate, you must also pay a “resort fee,” even if you have no intention of using the amenities the fee is intended to cover? The Federal Trade Commission thinks some hotel operators may be illegally hiding these fees in order to mislead consumers about their room rates.

Following consumer complaints about “drip pricing,” in which businesses hide the real cost of a service by tacking on necessary extras after the fact, the FTC investigated whether or not hotel operators are being transparent about resort fees.

Looking at the booking sites for these hotels, the FTC found that some quoted a lower “total price” or “estimated price” that included only the room charge and applicable taxes, but omitted mandatory fees. Other sites did list the resort fee near the room rate, but still separately. And then there were the sites that marked room rates with an asterisk that ultimately led consumers to fine print — not always on the same page — detailing the fees. Finally, there were sites that simply stated that “other fees may apply,” even though “may” actually meant “will.”

So the FTC has fired off warning letters to 22 as yet unnamed hotel operators warning them that they may be in violation of the FTC Act by misrepresenting the hotel room reservation price quoted to consumers.

From the warning letters:

These practices may violate the law by misrepresenting the price consumers can expect to pay for their hotel rooms. We believe that online hotel reservation sites should include in the quoted total price any unavoidable and mandatory fees, such as resort fees, that consumers will be charged to stay at the hotel. While a hotel reservation site may breakdown the components of the reservation estimate (e.g., room rate, estimated taxes, and any mandatory, unavoidable fees), the most prominent figure for consumers should be the total inclusive estimate.

We reviewed your website… and found that in at least some instances mandatory resort fees are not included in the reservation rate quoted to consumers. We strongly encourage you to review your company’s website to ensure you are not misrepresenting the total price consumers can expect to pay when making a reservation to stay in your hotel. Please be advised that the FTC may take action to enforce and seek redress for any violations of the FTC Act as the public interest may require.

The FTC recommends that consumers contact hotels directly to ask about mandatory charges before they book a room. And if one hotel’s resort fee leads you to choose a competitor, it wouldn’t hurt to let them both know what motivated your decision.

Do you have a resort fee horror story? Tell us at Tips@consumerist.com with “Resort Fees” in the subject line.