Hidden Hotel-Fee Scams Are Getting Worse

The problem of hidden hotel fees is getting worse rather than better. Late last year, the Federal Trade Commission (FTC) sent out letters to 22 hotel chains warning them that failure to include all mandatory fees, including the widespread “resort” fees so common in vacation areas, is a deceptive practice. So how have hotels responded? In Las Vegas, a handful of hotels that formerly did not add those fees decided to start adding them. A FTC spokesperson indicated that it continues to work with hotels and considers that several have improved or are improving their displays of mandatory fees.

As a refresher, the fee scam works like this: Instead of posting the total price you have to pay, some hotels carve out part of the real price, give it a plausible name like “resort” or “housekeeping” fee, and feature the reduced partial price in their initial rate displays. To make the fees sound more acceptable, hotels typically provide a laundry list of amenities and services the fee is supposed to cover, but that’s a complete phony: If you have to pay it, it’s part of the price. If you’re lucky, the hotel adds that fee before you actually commit to the accommodation; but sometimes you don’t find out until you arrive at the hotel. And third-party online travel agencies and the several “opaque” sites such as Hotwire and Priceline typically content themselves by fine print that says you may be subject to additional fees.

The scam is rife in vacation destinations such as Hawaii and Las Vegas, where resort fees often reach as high as $30 per night. But the worst case I’ve seen was at the Lodge at Tamarron in Durango, Colorado, where a TripAdvisor contributor reported the cost of a two-night room, nominally $170, escalated by a $35 cleaning fee, a $40 resort fee, a $10 pool-and-spa fee, and a $5.10 processing fee. Another potential visitor I know, an attorney, arranged a two-night stay there through Hotwire, only to find after committing that the price would be hiked by a cleaning fee of $60. In the Lodge’s defense, its website now lists no special fees, although the price breakdown carries a suspiciously high rate—in excess of 20 percent of the base rate—as “taxes.”

At this time, it’s not clear to me that the FTC standard really solves the hotel problem as well as Department of Transportation (DOT) requirements solve the airfare problem. With airfares, DOT requires that airlines include all mandatory charges in the initial fare display. Instead, with hotels, the main change I’ve noticed so far is that some are displaying fees more prominently, but none is including fees in the initial price displays. And prominent display somewhere along the line doesn’t really solve the problem: If it’s not included in the initial price display, it’s a scam.

As a partial work-around, last week I submitted a “Petition for Rulemaking” to the DOT. DOT rules say that anyone selling an air ticket or an air tour component must display the full price. So, where an airline bundles hotel accommodation as part of an air-hotel package, DOT can require airlines to include the full hotel price as well as the full airfare, including all extras. If you’re interested in supporting this position, log onto regulations.gov, search for “Docket DOT-OST-2013-0058” and submit a comment.

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Sadly, resort fees will be with us until government action outlaws the scam. There’s an obvious “Gresham’s Law” about hotel pricing—deceptive prices drive out true prices—and many hoteliers claim that they use the fee deceptions only because their competitors do and they have to “stay competitive” in the price displays.

Meanwhile, no matter what agency you use to arrange hotel accommodations, before you commit, check out possible fees on a hotel’s own website. And if you book a room in a popular vacation destination area through an opaque website, you have no effective defense. Just figure that it’s a good possibility you’ll be hit with a hidden fee—without much recourse.

Note: I filed my petition as a private citizen, not as a representative of Tribune Media Service or SmarterTravel.com.

Ed Perkins on Travel is copyright (c) 2012 Tribune Media Services, Inc.

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