Should Hotels Be Required To Include Mandatory “Resort Fees” In Published Room Rates?

Image courtesy of Larry Smith

In order to minimize surprise when it comes time to pay, airlines in the U.S. now need to include all mandatory fees in their published airfares, but the same isn’t true for hotels. Many destinations now tack on so-called “resort fees” that claim to cover things like access to in-hotel gyms and pools, but which are mandatory for all guests whether you use those amenities or not. Even though these required add-on charges can significantly increase a guest’s total bill, hotels do not have to include the fee in their listed rates.

Back in 2012, the Federal Trade Commission issued warning letters to 22 different hotel operators — the agency didn’t name names — that weren’t being transparent enough about their resort fees.

Advocacy group Travelers United recently called on the FTC to take legal action against hotel operators who fail to include all mandatory fees in their listed rates.

“If a hotel charges a mandatory fee, it should be included the nightly room rate,” writes the group. “Failing to do so deceives about the true cost of the room and undermines the power to comparison shop.”

But when L.A. Times travel writer Hugo Martin spoke to an FTC attorney about the issue, the agency didn’t seem terribly interested in going after resort fees.

“At this time, we don’t have evidence to prove that not including the resort fee in the room rate is deceptive if a hotel prominently discloses the resort fee upfront and includes it in the total price” said the FTC staffer.

So the question is: Are these fees being “prominently” disclosed?

Knowing that many Las Vegas hotels include resort fees, we picked three at random to see how they displayed their fees.

TREASURE ISLAND:

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After selecting the dates and number of guests, the TI website gives you several options with their corresponding prices. The “Total” price is for just the room rate without any mention of a resort fee… But when you go to actually book the room —

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This is where you find out about the $29 (plus tax) resort fee that you can’t opt out of. With taxes, the fee adds $97.44 to your total stay, increasing your total bill by more than 50%.

HARD ROCK

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This hotel’s site includes the $25 (plus tax) resort fee up front before you get to individual room rates, but in very small print and apart from the per-night numbers.

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Here again, the “Total Room Rate” does not actually include the mandatory fee, even though it’s nearly 2/3 the dollar value of the nightly room rate.

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It’s not until you get to this payment screen that you actually see how much of an impact the mandatory fee has on the total invoice, increasing the amount due by around 70%.

THE VENETIAN

This is by far the most expensive hotel of the three we looked at, meaning the resort fee will have a smaller overall impact on the resulting tab, but the hotel’s website seems to do the most to not include the fee.

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No mention of the fee in the initial offer page, though the Venetian does give an average nightly room rate.

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Things get a little more transparent on the next page, where there is a mention of the rate not including a $29 (plus tax) resort fee. But when you go to actually book the room you want —

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The “Grand Total,” which includes the room tax and the nightly room rate still does not include the resort fee, which the hotel says is “payable upon check-in.”

While the FTC might not be able to force hotels to include resort fees in their total rates, it could provide clear guidance to the industry on best practices for displaying these fees so that consumers aren’t misled. The agency could also take legal actions against hotels that go too far in their attempts to hide their mandatory fees from guests.