Senator Introduces Bill Preventing Hidden Resort Fees

If you’ve stayed at any number of resorts over the course of your life, you’re surely familiar with resort fees, which hotels often aren’t very transparent about. These are fees you have to pay in addition to the room rate, and often cover things you would assume would be included with your room rate.

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The Royal Palm South Beach has a $30/night resort fee

These fees are a sneaky way for hotels to make their rates seem artificially low (since the resort fees typically aren’t included when the nightly rate is displayed), and also to screw travel agents out of commissions (since travel agents get commissions on room rates and not taxes & fees). I guess at some point it simply becomes necessary as a competitive measure. After all, if you can’t beat them, join them.

But the trend continues to be puzzling, and we’re even seeing resort fees at some city hotels.

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Le Parker Meridien New York City charges a $15/night “facilities fee”

It’s not often that I think the government is the solution, but this might be one of the instances where they are. In 2012 a law was introduced requiring airlines to improve transparency in displaying fares, including only advertising all-in prices. That meant airlines could no longer advertise prices which didn’t include the taxes, fees, and carrier imposed surcharges.

A Democratic senator from Missouri has introduced a bill which would do something similar to resort fees at hotels.

Via USA Today:

The legislation would require hotels to disclose and include the full cost of a traveler’s stay in their room rate.

“I don’t think it’s any of the government’s business what they charge for the rooms,” McCaskill told USA TODAY. “But I want the consumers to know how much they are getting charged for their rooms.”

Her proposed legislation would explicitly prohibit advertising a hotel room that does not include all required fees. It would give the Federal Trade Commission the authority to enforce the prohibition. It would also give state attorneys general authority to enforce the prohibition by bringing a civil action in federal court.

That’s a bill I’m fully in support of!

What I’m surprised to read, however, is that the American Hotels and Lodging Association says that resort fees have been declining since 2004:

According to an AHLA survey, only 7% of 53,000 hotels charged resort fees in 2014.

I’m not sure I’d draw quite the same conclusion. To me it seems much more likely that we’re seeing more limited service properties introduced than ever before, which don’t typically have resort fees. That might explain the proportional decrease in resort fees. However, I don’t think we’re actually seeing a trend where full service hotels are eliminating resort fees.

Bottom line

I’m fully in support of this bill. As far as I’m concerned hotels can keep charging resort fees, but they should be displayed as part of the cost in advertisements and when booking. I get emails all the time from hotels advertising their low rates, but they don’t include the resort fee. It’s time they change that.

MGM-Rate

Do you support the bill to more clearly disclose resort fees, or is it not something the government should get involved in?

Comments

  1. I am for it. The fees are shady and only intended to deceive and grab extra revenue at unsuspecting customers.

  2. the interesting thing about resort fees is that hotels/resorts can’t even justify them as a tax arbitrage play. for the most part, the fees are subject to the same lodging taxes as the room rate. so, it’s not like airlines moving to increase and impose various fees that are not subject to aviation taxes.

    I have no problem with optional resort fees that include extra amenities, but mandatory resort fees should absolutely be eliminated.

  3. I strongly support the concept of the bill (S.2599), but reserve final judgement until the text of it becomes available on Congress.gov

  4. The resort fee is a way of properties enticing you in to stay, with a cheap rate, then grabbing additional dollars once you are hooked. It not as underhanded as some think, but appeals to the buyer of a travel experience who doesn’t want to layout a lot upfront, through the room rate. Its clever marketing in a way, but I agree it should be displayed in the room cost.

  5. Seems like a no-brainer to me. Would love to see properties forced to advertise prices that include all required costs. If it can’t be waived, it should be included in the room rate.

  6. @Paul

    How is it not underhanded?

    Not picking an internet fight, just trying to understand your POV.

  7. Totally support it. How about restaurants enforcing a 18% gratuity depending of the number of people in your reservation? For me that is the same as a resort fee. Charge me more for the food and let me decide if I want to pay that price. Give me an impecable service and I will decide if I want to give a tip and how much I want to give.

  8. Totally. It would be ok if the fee was optional (i.e. I decidided not to use the Internet or whatever during my stay). But mandatory resort fees are extortion by definition and should be banned or regulated. This is one case where the government rightfully should get involved.

  9. Yes! Finally! Sen. McCaskill has my support with this legislation.

    Other smart democracies don’t allow hotels to advertise $99/room hotel nights when the room really costs $99 + resort fee + municipal tax + sales tax.

    US reformed transparency in airline ticket pricing a few years ago, and we all benefit from it. Let’s do the same with hotel rooms and care rentals. The misleading price quotes with car rentals is even worse than the problems with hotels.

  10. European laws mandate hotels advertising all-inclusive costs, including taxes.
    I’m used to seeing the all-inclusive rate hence when I travel to the US or Asia, where taxes and/or service charges are not included in the rates displayed, I feel cheated.

  11. As the old saying goes, “The only guarantee in life is death and taxes”. We get that but one thing that has constantly annoyed me is so many countries allow “+ applicable taxes & fees”. In some case this is almost 30% (UK VAT + other taxes and fees). The advertised price should be what the customer is paying. In Australia, all prices have to be quoted as inclusive prices on everything, not matter what taxes are or aren’t applicable. Whilst most things governments do is a complete screw-up, that’s one thing they got right.

  12. I grew up in the UK, and personally never had to calculate a ‘plus tax’ price – it was all included in the sticker price. So prices are high, but they’re all high, and you don’t have to mentally budget for another 7-15%. I’d rather compare products that are £850 and £1010, knowing that’s the final price, than have to work out whether $500+taxes/fees is better/worse than $550+taxes/fees when it can very well turn out to be $700 and $600. That’s not right. If you think your product deserves to cost more, market it that way, don’t extort it.

  13. They should also include some indication when valet fees are mandatory if there is no self parking. For example, the Andaz Maui has a $30 per night valet fee (no self parking option) + $40/night resort fee. That is $70/night + tax extra on top of their room rate. Oh, and how often does the resort fee actually list something that you use? Hmmmm, can’t remember the last time I used the room phone to make a local call.

  14. I successfully argued to get the $28 a day resort fee at the SLS Las Vegas removed. It was the winter off-season, all the “resort-y” things were unavailable (pool and outdoor area closed). It took a lot of work but they agreed to drop the fee. That’s a substantial bonus on a 3 night stay when I was paying $43 for the room per night. Charging the fee when the resort areas are closed is a huge scam. Also charging a fee when 50% of the guest wont use the “resort” features is also of dubious merit.

  15. I’m surprised you didn’t mention the award angle. When you use points for your stay, the hotel chain corporate reimburses the hotel for your stay. Usually they pay the hotel a fraction of what the room rates are. This is why hotels love resort fees- they can make money on travelers using points.

  16. @steve Regarding “US reformed transparency in airline ticket pricing a few years ago…”, you are correct. HOWEVER, note that there is a provision in the pending FAA budget bill to again allow airlines to advertise base (i.e., non-inclusive) airfares.

  17. I’m probably one of the most anti-regulation people out there, but this one I’ll get behind 110%. “Resort” fees, or any other mandatory fees for that matter, are pure evil. If I have no choice but to pay the fee, then it needs to be folded into the rate, period. Personally, I vote with my wallet and boycott any hotel that charges resort fees, but I realize that puts me in the extreme minority.

    My speculation on the 7% number – on the aggregate that is probably accurate, but it really depends on where you go. For example, good luck finding a hotel that doesn’t charge a resort fee in Honolulu or Vegas, for example.

  18. It’s about time. If I’m required to pay it, then it’s part of the room rate…period! Make the fee/services optional or tell the truth when quoting a room rate.

  19. I don’t agree with many Democrat policies/programs, but this is an excellent idea. If you have a $100/night + $30 resort fees, just charge $130 per night. I hate the deceptive ~30% add-on that they sneak into the reservation at the last second, or not at all. And sometimes you don’t even realize it till you get your folio after checking out.

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