Should hotels advertise “all-in” prices, too?

By | February 15th, 2012

If you recall last month’s dust-up about airfare pricing, you’ll know that airlines feel singled out by the federal government, which is now requiring them to advertise fares that include all mandatory taxes and fees.

Here are a few details about that dispute. Never mind that other federally-regulated industries have the same pricing requirements, including anyone buying gas, cigarettes or alcohol. Airlines wanted to see other examples in travel, dammit.

And so did readers.

“Spirit’s [CEO] Baldanza is right about one thing,” says Valanie Bradley, “They should make the hotels quote an all-in price, too.”

She sent me screenshots of what she considered the most egregious example of misrepresentation: La Quinta Inns & Suites’ website.

They give you the base price and tell you it does not include applicable taxes or fees — in small print.

I intended to book a room on the La Quinta site, but was so irritated that I went with the hotel I was comparing it with. That hotel is $5 more on the base price and has some mysterious $2 fee, but at least they were up front about the fact that they were charging it.

She’s right. Hotels, which are regulated by the states and not the federal government, don’t really have to show you an all-inclusive rate until you check out.

Many don’t, pointing out that you might charge something to your room, which would change your bill. They also say there are technology reasons for waiting until the very end of the transaction to reveal your price, although I suspect it may be a psychological reason as well. People book cheap rooms, and if you start quoting rates that include taxes and mandatory “resort” fees, they’ll look elsewhere.

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I looked at La Quinta’s site, and Bradley is right. Just like the airlines once did it, La Quinta currently quotes a low “base” rate that doesn’t include the required taxes and fees. That makes its rooms appear to be cheaper than they really are.

I asked La Quinta about its rate display. Teresa Ferguson, a La Quinta representative, explained that the display problem was largely technological.

“We do have some limitations in our reservation process that currently do not provide an all-in price prior to a guest providing a credit card,” she told me. “We are working to change this and happy to say that in April through a new site release, guests will be able to see the total price prior to providing their credit card.”

That’s nice, but what about the other hotel chains that continue to dangle a $19 a night rate in front of you — minus taxes, mandatory fees and required “resort fees” that eventually boost the rate to $49 a night? Can’t the government do something about that?

Maybe. If the attorney generals of several tourism-dependent states banded together to file a suit against the major hotel operators, the resulting consent agreement could mean more transparent pricing. They did it in the past on “energy” fees, for example. Also, the Federal Trade Commission could target several big hotel companies for unfair and deceptive practices, and the resulting settlement could have a ripple effect throughout the industry.

Or Congress could do something, putting pricing practices under the control of one of the federal agencies and asking it to regulate how hotel rates are displayed.

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Ideally, none of this would be necessary. Instead, hotels would voluntarily display the actual rate you have to pay for a room, including all required taxes and fees. I don’t know of any hotel guests who like to be kept guessing about their final bill, even the most die-hard libertarians.

No one likes surprises.

(Photo: faungg/Flickr)



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