This bill would kill hotel resort fees – but will it pass?

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Everyone wants to kill hotel resort fees, those annoying extras added to your hotel bill after you ask for a price quote. The latest effort comes from Sen. Claire McCaskill (D.-Mo.), who wants to legislate the controversial surcharges out of existence.

McCaskill yesterday introduced the Truth in Hotel Advertising Act of 2016, a law that would prohibit hotels from advertising a room that doesn’t include all mandatory fees. It would also give the Federal Trade Commission the authority to enforce the prohibition and state attorneys general the power to bring a civil action in federal court against violators.

“It’s clear there’s a bait-and-switch going on when it comes to these hidden hotel fees,” said McCaskill, “and consumers are paying the price.”

Here’s the full text of the bill. And this is the exact language that would eliminate the fees:

SEC. 3. PROHIBITION ON UNFAIR AND DECEPTIVE ADVERTISING OF HOTEL ROOM RATES.

(a) PROHIBITION.—No person with respect to whom the Federal Trade Commission is empowered under section 5(a)(2) of the Federal Trade Commission Act (15 U.S.C. 45(a)(2)) may advertise in interstate commerce a rate for a hotel room that does not include all required fees other than taxes and fees imposed by a government.

Resort fees have exploded in popularity, rising 25 percent last year.

For consumers, the prospect of eliminating resort fees is a welcome one. Not a week goes by that I don’t get a complaint from a hotel guest, who reports being broadsided by one of these fees. The industry’s excuses for imposing them — and federal regulators’ reasons for failing to stop them — have rung hollow.

The real question is: Will this bill pass?

Consumer groups, including Travelers United, an organization I co-founded, and the National Consumers League, are lining up behind the McCaskill bill. Also supporting the law: Online travel agencies, who are tired of having to justify these random extras to their customers, and, of course, hotel guests.

Interestingly, the major hotel chains are also likely to quietly support this proposed law. Why? Because for them, resort fees are also a hassle. Privately, hotel chain representatives have indicated that while their franchisees pocket the fee, they don’t really benefit from it at the corporate level. They also have resort-fee complaint fatigue. (Don’t we all?)

Who will stand against the bill? The American Hotel & Lodging Association (AH&LA), the trade organization for hotels, will probably try to kill this law. Many of its member derive a significant portion of their profit from the fees. Having to disclose the fee up front, as part of the room rate, rather than waiting until the check-out screen — or in extreme cases until a guest checks out — would hurt their business.

The hardest-hit of the hotel groups will be Las Vegas casinos and resort hotels in Florida and Hawaii. It’s possible that the American Gaming Association, the main lobbying organization for casinos, will flex its lobbying muscle. It’s also likely that at the local level, non-gaming resort hotels will pressure their senators to vote against this bill. It probably depends who is up for re-election and how much the lawmakers stand to lose in campaign donations.

Because one thing is certain: They’ve all experienced mandatory resort fees in some form or another, and no one likes them.

So how will this one end? I predict this will pass. McCaskill has been a vocal opponent of mandatory resort fees. Her proposed law appears to be a direct answer to Federal Trade Commission Edith Ramirez, who asked Congress to help it fight these hidden fees. And the political winds currently favor the Missouri senator.

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Christopher Elliott

Christopher Elliott is an author, journalist and consumer advocate. You can read more about him on his personal website or contact him at chris@elliott.org. Got a question or comment? You can post it on our help forum.

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  • sirwired

    The mere fact that the primary sponsor has a “D” after the name will almost certainly lead to the bill being reflexively ignored by the appropriate committee, no matter the merit.

  • KanExplore

    Of course resort fees are bad and should be banned. They are a scam, and no, they are not the “perfect evolution of the free market.” The “free market’ does not condone fraud, which is what these charges are. I really try hard to be positive about Elliott, but even when I totally agree with his position, and would like to work by his side on an issue, he finds it necessary to include something to make it difficult to do so.

  • MarkKelling

    If a fee or any other cost of staying at a hotel is mandatory it must be
    included in the advertised price. Mandatory is not optional. This is not the same as the various
    fees for luggage, seats, food, etc that airlines charge because those
    truly are optional.

    Since my favorite hotel in Hawaii started charging resort fees, I have stopped staying there. While I doubt the hotel misses the couple thousand a year I spent there, I have told them that because of the fee (even though it is prominently displayed on the web site at booking time) and as long as the fee exists I will not stay there and have told my friends not to. I did receive a polite actual letter from the hotel manager which went into a long winded explanation about how much benefit I receive from the small fee when I stay there and they have to charge it because every one else does. I have not replied to inform him that because of my status with this particular chain I get all of what the fee covers for no charge anyway so why would I want to pay extra for it. The hotel I have chosen provides everything the other one did (except the location is a bit less prime) and actually costs less.

  • MarkKelling

    Sad but true. It is unfortunate that the government as a whole is no longer for the people.

  • Joe Blasi

    At the very lest make so that the hot wire / price lines must show the full price before you get to the finale buy yes / no screen.

  • DavidYoung2

    Yes, unfortunately Congress doesn’t work anymore. As a conservative Republican, I’m embarrassed for my own party.

  • PolishKnightUSA

    Resort fees remind me of the tragedy of the Commons model or the lowest common denominator. “Everyone else does it” means that the standards are lowered and may harm the community, and business, in the long run but it’s done because those who make a stand wind up getting steamrolled.

    Transparency in pricing helps the industry since people trust the system and are less suspicious.

    Regarding Vegas: I have friends who tell me that Vegas is going to go the way of Atlantic city, soon. Vegas is migrating from a gambler model to a “family friendly” and nightclub model but like with gambling, this can be offset by local competition elsewhere. Why fly to Vegas to go to a high priced NYC nightclub when New York is a train ride away? Why fly to Vegas to go to a Cirque show when the circus (literally) comes to town twice a year? Vegas claims to have a loose, adult atmosphere but as I discovered at my wedding, I couldn’t drink champagne in the back of the limo. And unlike other cities, Vegas casinos are smoky.

    They may find that having the resort fees is just one more reason to avoid them.

  • NotThatBrooklynGuy

    I’d say it does not go far enough. Instead of the title being “SEC. 3. PROHIBITION ON UNFAIR AND DECEPTIVE ADVERTISING OF HOTEL ROOM RATES.” it should be “SEC. 3. PROHIBITION ON UNFAIR AND DECEPTIVE ADVERTISING OF PRICES.”

    Go to buy a ticket for a concert advertised at $30 but the tickets really cost $50 after all the fees? Make it illegal.

  • FQTVLR

    I got zapped by a resort fee in Vegas a few years ago. Most everything included was “on request only”. Too bad they were always out of newspapers, housekeeping was too busy for the “included” turn down service, I was physically unable (walking with a cane and wearing a back brace) to use the fitness center. Too bad said the resort who said I had to pay the fee. “Paying Under duress” I wrote on my bill when I checked out (and made sure to get a photocopy of the bill). i also had dates, times and names when so-called inclusions were not available for various reasons. I filed a dispute with my card company and won. The fees need to be eliminated and if that takes a law to do it, so be it. No one should be paying extra for the services that never seem to take place.

  • flutiefan

    people here want to kill resort fees, but make travel insurance mandatory. priceless.

  • KanExplore

    Good for you! I have never yet paid a “resort” fee and I hope I never will. When I see that scam in the booking process, the booking stops cold. If they’ll lie to you about their prices, they’ll lie to you about anything else. Do not support this fraudulent pricing which not only misleads the consumer, but also forces would-be honest people to join in or be at a disadvantage.

  • David___1

    Frankly, I don’t care about resort fees. I care about hidden fees. If hotels tell me a room costs $298 then I expect it to cost $298, not $323 after a hidden fee is added. The poll question doesn’t really address what the bill is about. It’s about disclosure, not about banning fees.

  • KanExplore

    Good observation. I think if “advertise” means “list as a price”, then the bill does the job. That’s a legitimate question about clarity though.

  • Bill___A

    I do care about resort fees. Hidden or not, they are bad. And not acceptable to me. They are described as for things you either don’t use or would otherwise get as part of your room rate. Deceptive, inappropriate and need to be gone.

  • Bill___A

    Banning them puts every hotel on the same page. The problem with some hotels having resort fees and some not is the ones who have everything in their rate lose out. Making everyone come out with their true price is fairer for the hotels too.

  • Bill___A

    Good points, my thoughts exactly. This law should make it easier for everyone, hopefully it is worded well enough that it is a non issue.

  • 42NYC

    I couldnt vote in this poll. I dont necessarily think they should be banned, I just think they need to be more clearly disclosed.

    Booked a trip to Vegas this week. Staying at Mandalay Bay. Their website was very clear about the resort fee, I saw it every step of the way and while I think it’s absurd to charge $33.60 a night for wi-fi, phone calls, gym access and incoming faxes at least they were up front about it and I could mentally prepare for the cost.

    As my flight lands at 11:30pm and my friends all arrive the following day I booked my first night at the Hooters Casino for $29 (figure i’ll check in, go to sleep, wake up and head to Mandalay). I knew a resort fee would be added but didnt see it anywhere, only at the final booking page did it say in small print “a resort fee of $22.34 will be collected at check in.” I very easily could have missed this.

    Two different hotels, two very different situations. No surprise that the ‘upscale’ hotel was upfront about the fee while the ‘budget’ hotel was hiding the fee.

  • 42NYC

    Don’t know when the last time you bought concert tickets was, but Ticketmaster now shows total costs including fees upfront. I think the fees are way too high but at least they’re now on the first page “total cost $48.75 including $9 service fee and $4 venue fee”

  • 42NYC

    who wants to make travel insurance mandatory?

  • AAGK

    Why can’t the hotel include the fee in the mandatory pricing display. Including the taxes has been enormously helpful in decision-making, it is absurd to allow properties to evade the spirit of the law with these fees, even worse is that most of these properties are not resorts. If the hotel needs the additional revenue, it can charge more for its amenities or raise its prices so that consumers can vote with their wallets. Hiding these costs is absurd.

  • NotThatBrooklynGuy

    When I look in my local newspaper for things like watching a motocross race, hockey game, concert, etc. the price in the paper is almost never the full price.

    When it is super-local, like a high school play, then the advertised price is right.

  • BMG4ME

    I agree. I am amazed that it’s considered wrong to hide resort fees (which it is) yet some people consider it OK to hide taxes.

  • Robert Delvo

    Yeez, send a letter to your congress person or senator. Put them on notice or perhaps Chris will list all the folks that vote against the bill. Then CALL your congress person and voice your displeasure with their actions. There are significant number of business travelers that spend a significant amount of money with these hotels. The bill should INCLUDE all fixed costs including TAXES, FEES and all other BS terms. My hotel in St Louis now has a new fee……………it is called “other fee”. They tell me the nearby airport requires the “fee”. Sure!!!!!! And for fun let’s have a new contest. Which city has the most added “fees” to your final rental bill. I know that Las Vegas and Kansas City are neck and neck in the lead. Submit your nominee.

  • flutiefan

    read the cruise and rental car posts.