The Federal Trade Commission is expected to require resort fees to be included in the initial price quote to customers. Resort fees, which typically cover amenities that were previously included in the price of hotel rooms, have jumped 8% on average in the first six months of 2016.
An alarming rise in mandatory resort fees is pushing the Federal Trade Commission (FTC) to consider a change to its four-year-old policy on the controversial surcharges, The Huffington Post reported.
In 2012, the federal government’s consumer protection agency allowed hotels to add required fees to their room rates as long as the surcharges were disclosed before the room was booked. But it created a loophole that allowed properties to quote a low initial room rate online and then add the mandatory fees later in the process, which consumer advocates argued was unfair and deceptive, Huffington reported.
Now, the FTC may be ready to signal that it agrees that resort fees as they are currently advertised are unfair and deceptive. The agency is poised to announce a policy shift that would require resort fees to be included in the initial price quote, a move that would effectively end resort fees as we know them. It’s a position that even the hotel industry seems to be warming to, Huffington reported.
The FTC declined to comment to Huffington.
Resort fees, which typically cover amenities that were previously included in the price of hotel rooms, such as the use of an exercise facility or business center, have been a long-standing irritant for hotel guests. In the first six months of 2016, the fees have jumped 8% to an average of $19.52 a night. The markets with the biggest increases: the Florida Keys (24%), followed by Myrtle Beach, S.C., (22%) and Miami (20%), Huffington reported.
“This was quite shocking to me because resort fees are already so high,” said Randy Greencorn, who tracks resort fees on his site, Resortfeechecker.com. “I did not think there was room to grow.”
But there is, and one of the triggers may have been a hearing last year by the Transportation Department’s Advisory Committee for Aviation Consumer Protection, in which an agency representative affirmed that the fees were allowable and could be added to the cost of a room, as long as it was done before the booking was complete. Hotels viewed this as a green light to not only continue charging the fees but to aggressively increase them, Huffington reported.
“Breaking apart the resort fee from the room cost has no purpose, except to make the room rate look less expensive at the time of booking,” Greencorn said.
The FTC’s decision would mark the latest chapter in a lengthy fight between the hotel industry and consumer advocates. Customers have fought the fees for more than a decade, but earlier this year, they found a friend in Washington when Sen. Claire McCaskill (D-Mo.) introduced the Truth in Hotel Advertising Act of 2016, a proposed law that would prohibit hotels from advertising a room rate that doesn’t include all mandatory fees. The bill also gives the FTC the authority to enforce the prohibition and state attorneys general the power to bring a civil action in federal court against violators, Huffington reported.
At the same time, there have been whispers that the hotel industry is pushing for counter-legislation that would explicitly permit hotels to charge resort fees. If either of these bills were enacted, they would override any policy decisions made by the FTC, Huffington reported.
There’s a lot at stake for hotels. Although there are no reliable numbers on revenue from resort fees, they are thought to generate hundreds of millions of dollars a year for the industry. Removing the ability to quote an initially low rate would almost certainly have a financial impact on the lodging business, Huffington reported.
Rosanna Maietta, a spokeswoman for the American Hotel & Lodging Association, said resort fees benefit hotel guests. “Our industry prides itself on offering an array of amenities and services to ensure guests have what they want and need from their travel experience,” she said. “We work especially hard to make sure they feel comfortable with their purchasing decisions. That’s why the hotel industry provides guests full disclosure for mandatory resort fees charged up front.”
Maietta said a survey by Axis Research that the association commissioned in April suggests that consumers value resort fees. More than half of the respondents said that they preferred the fee to be “broken apart separately” from the room rate, and 8 in 10 said they were willing to pay the extra resort fees “if the amenities are worth it,” Huffington reported.
Sara Rayme, a spokeswoman for the American Gaming Association (AGA), which represents casino hotels, says their guests asked for resort fees because they didn’t want to pay separately for extras such as Wi-Fi, pool usage, gym and spa access, and bottles of water. “Resort fees simply bundle together such amenities, up front, for the consumer,” she says. “As a result, resort fees have provided a much more transparent experience for the customer.”
Experts say that travelers want decisive action by the government’s consumer protection agency. “I have seen these fees pop up in recent years, starting with Las Vegas and now spreading all over the U.S.,” said Steven Grasso, president of North American Traveler, a tour operator based in Boston. “What most travelers want is to know the price per night, plus taxes. Everyone knows that this is just smoke-and-mirror marketing.”
Already, some hotels think the time has come to make these fees a relic of the past, along with high phone charges and Wi-Fi fees. Niki Gross, managing director of the Whitney Peak Hotel in Reno, Nev., said guests would be disappointed by a $25-per-night fee, Huffington reported.
“It’s somewhat akin to opening a new toy or electronic device and reading that batteries aren’t included,” she says. “Rather deflating.”
Average Resort Fees Dec. 2015 – June 2016 |
||||
City / Region |
State |
Dec 2015 |
Jun 2016 |
Change |
Florida Keys |
FL |
$19.95 |
$24.73 |
24% |
Myrtle Beach |
SC |
$8.42 |
$10.30 |
22% |
Miami |
FL |
$20.62 |
$24.65 |
20% |
Orlando |
FL |
$11.93 |
$13.95 |
17% |
New York |
NY |
$23.13 |
$25.72 |
11% |
San Diego |
CA |
$16.20 |
$17.75 |
10% |
Lake Tahoe |
CA |
$15.60 |
$17.05 |
9% |
Las Vegas |
NV |
$23.33 |
$24.65 |
6% |
Daytona Beach |
FL |
$8.21 |
$8.72 |
6% |
Palm Springs |
CA |
$19.97 |
$20.61 |
3% |
Panama City Beach |
FL |
$18.48 |
$19.07 |
3% |
Fort Lauderdale |
FL |
$18.72 |
$19.19 |
3% |
Park City |
UT |
$22.22 |
$22.77 |
2% |
Orange County |
CA |
$13.03 |
$13.20 |
1% |
Maui Island |
HI |
$23.24 |
$23.32 |
0% |
Breckenridge |
CO |
$24.00 |
$24.00 |
0% |
Aspen |
CO |
$28.22 |
$28.24 |
0% |
Summit County |
CO |
$22.50 |
$22.50 |
0% |
Snowshoe |
WV |
$18.09 |
$17.74 |
-2% |
Oahu Island |
HI |
$19.68 |
$18.87 |
-4% |
Tucson |
AZ |
$19.40 |
$18.65 |
-4% |
Sedona |
AZ |
$18.13 |
$17.43 |
-4% |
Los Angeles |
CA |
$13.72 |
$13.20 |
-4% |
Phoenix |
AZ |
$23.92 |
$22.68 |
-5% |
Average |
|
$18.09 |
$19.52 |
8% |
Source: Resortfeechecker.com
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