Are hidden hotel fees about to check out? By Christopher Elliott | December 8, 2012 After Jane Hatch selected the room rate she wanted at the West Street Hotel in Bar Harbor, Maine, the hotel Web site delivered an unpleasant surprise on the next screen: The quoted price hadn’t included a $25-per-day “resort and club fee” that gave Hatch access to the hotel pool, hot tub and fitness center — whether she wanted it or not. “They didn’t tell me until the end,” says Hatch, who lives in Montgomery Village, Md. “I still booked the room, but it was misleading and unbecoming, particularly for a new property looking to make its mark. Perhaps they don’t care in resort areas like Bar Harbor. But I care.” So does the Federal Trade Commission. In a surprise move, the consumer protection agency recently warned 22 hotel operators that their online reservation sites may violate the law by displaying a “deceptively low” estimate of what consumers can expect to pay. In May, the FTC hosted a conference on “drip pricing,” in which companies advertise only part of a product’s price and reveal other charges later as you go through the buying process. The FTC has received many consumer complaints about hotel resort fees, and this fall, several consumer advocates wrote a letter to the agency, asking it to crack down on them. “This is good news for consumers,” says Bjorn Hanson, dean of New York University’s Center for Hospitality, Tourism and Sports Management. “It will eliminate some of the disappointment and frustration they have when they haven’t been aware that there will be resort fees. I think it also will be good for so many hotel employees, who will now not have guests be surprised, as they seem to be so frequently.” A representative of the West Street Hotel defends the property’s mandatory fee, calling it a “terrific value.” “The feedback from guests over the summer, which was the first season for the new hotel, was largely in favor and agreement about the value of the fee,” adds Jennifer Cuomo, a spokeswoman for the property. She says that Hatch was shown an all-inclusive rate online before booking, in accordance with the FTC guidelines. The West Street’s Web site shows the full charge after a basic room rate has been selected. The FTC action stops short of what the Transportation Department did this year for airfares, requiring airlines and online agencies to display an “all-in” fare that includes every mandatory charge up front. Consumer advocates remain hopeful that the warning could translate into enforcement actions entitling shoppers to see the full price initially, when they ask for a price quote, and not at the end of the booking process, when many have already decided to reserve the room. Ed Perkins, one of the leading voices against resort fees (and, by way of full disclosure, a columnist for Tribune Media Services, which syndicates one of my columns), calls the FTC’s warning a “partial victory.” “Apparently, at least some hotels are being careful to note the fees immediately, and they’re also noting the fees in what they post to online travel agencies such as Expedia,” he says. “As far as I can tell, they’re complying with what the FTC asked.” But as of late last week, it remained unclear whether any hotels that had received the warning had taken action to comply with it. The FTC wouldn’t say which ones had been cautioned. I asked most of the major hotel chains whether they’d seen the letter, and I received a variety of responses. Hilton referred all questions to the American Hotel & Lodging Association, the trade association for the U.S. hotel industry. Joe McInerney, the association’s president, says that “misunderstandings” aren’t necessarily caused by resort fees but often by online travel agencies that display a rate that doesn’t include the fees. He says that his association doesn’t set standards on the acceptability of charging a resort fee. The FTC warning has been referred to the group’s attorneys, McInerney says. “We’ll probably send out an advisory to our members soon.” Other hotel companies either didn’t respond to my questions or said that they hadn’t received the FTC letter. Of the major American hotel chains that I contacted, only Marriott, which owns the Courtyard, Renaissance and Ritz-Carlton brands, said that it had been warned. But a company spokesman says that Marriott is already following the law. “We do disclose fees before the booking is completed,” says John Wolf, a Marriott spokesman. “We believe we are in compliance.” Gary Cohen begs to differ. He says that he was surprised when Ritz-Carlton tacked a $25 resort fee to a recent $600-a-night rate. The amenities should have been included in the room price, he says, not separated as a mandatory fee. “Do you really need to nickel-and-dime your guests another $25?” asks Cohen, the president of a health food company in Sacramento. “I guess in the case of the Ritz, the answer is yes.” What’s going on here? Hotels want to quote a low base rate to entice guests to book their rooms, while travelers just want to know the total cost from the start. For now, it appears that the FTC will allow hotels and online agencies to continue displaying an artificially low price, as long as they reveal the full rate at some point before a purchase is made. But the FTC is just getting started, and the government can tighten its requirements or force the industry to change the way it displays prices through a series of enforcement actions or lawsuits as it tries to address the problem of drip pricing. In the meantime, customers who find a mysterious resort fee at the end of a booking path can do what Cohen and Hatch did: complain. Cohen says that Ritz-Carlton never responded to his grievance, but Hatch’s resort fee in Bar Harbor was stricken from her bill. Maybe the FTC’s actions haven’t killed mandatory resort fees. In fact, no matter where or how the fees are disclosed, NYU’s Hanson says, they’ll continue to exist because they allow a hotel to avoid paying certain taxes on them. But “gotcha” resort fees as we know them in the United States may be mortally wounded. Are resort fees dead? Yes. No. View Results Loading ... Christopher ElliottChristopher Elliott is an author, journalist and consumer advocate. You can read more about him on his personal website or contact him at firstname.lastname@example.org. Got a question or comment? You can post it on the new forum.More Posts - Website - Twitter - Facebook - LinkedIn - Google Plus http://thestockhome.com/ Josh S On the one hand, if you’re paying $600/night for a room, $25 for the spa/gym/pool doesn’t seem like that big a deal. On the other hand, if you’re paying $600/night for a room, you’d think the cost of things like the spa/gym/pool would be included already. Hotels really ought to be clear about that up front. technomage1 It doesn’t matter the cost. They should be clear about it up front if it’s a $50 a night hotel or a $5000 a night hotel. Steve Rabin I think the FTC is missing the point–the real problem is the fees themselves. I would have less problem with a la carte pricing–paying for the pool if you use it, for example, but not bundled up as a mandatory ‘fee’ whether you use the amenity or not, which is really a transparent rate increase. I’m actually surprised the states haven’t gotten involved with these–as fees, they are non-taxable while the room rate is…you would think the states would have a vested interest in rolling them up in the room rate. jim6555 At most hotel sites, you can still cancel a reservation if you are upset with the hidden fees. Those who use opaque sites like Priceline or Hotwire don’t find out about the fees until after they have committed to a non-refundable stay. I have learned not to book hotels at opaque sites when my destination is a resort area. http://flyicarusfly.com/ Fly, Icarus, Fly The fact that the representative of the West Street Hotel defends the property’s mandatory fee, calling it a “terrific value”, shows that s/he doesn’t grasp the issue at all. It may be a great value, but what the public is asking for is that it is divulged from the get-go. If it’s mandatory, then it’s part of the pricing. And what’s with the Ritz waiting to tack it on? Do they really think someone who’s willing to pay $600 a night is going to be comparison shopping? Get real. Make it visible upfront. I had a similar experience with booking AirAsia flights recently. It added a “convenience” charge when I went to pay online. When I called them to ask how much the tickets were if I came down to their office to pay cash, they replied it would be the same. But now, instead of being a “convenience fee”, it’s called a “processing fee”. Call a spade a spade. Don’t treat customers like idiots. BobChi I voted no, but would have certainly preferred for the opposite to be true. This is just lying about your price to get business. If a fee can reasonably be avoided, it is a fee. If it cannot be avoided by the consumer it should be a law that it be included in the base price given to the consumer, period. BillCCC Not dead but soon to mentioned much earlier in the booking process. A mandatory fee is not a fee, it is part of the rate and as such should be included in the rate or be optional. Nikki Dead? Are you kidding me? It’s not even on life support. Somebody is going to find a loophole and jump right through it. One way or another, that resort fee is going to find its way into your hotel bill. TonyA_says No, it is the FTC that checked out a long time ago. Same with the States. The Attorney Generals should be all over these false advertising violations. However looking at who owns the resorts, it is no wonder politicians are not interested. Same private equity and hedge fund folks you see attending $30,000 a plate dinners. Besides, isn’t the dirctor leaving soon? So, what is the new head gonna do? TonyA_says Nikki, read this http://my.chicagotribune.com/#story/sns-rt-us-usa-politics-fcc-ftcbre8b30u2-20121204/ and tell me if you feel any better :-) Updated link: http://www.reuters.com/article/2012/12/04/us-usa-politics-fcc-ftc-idUSBRE8B30U220121204 SoBeSparky Small steps lead to larger changes over time. It used to be at some resorts that you were apprised of a “resort fee” upon check-in, maybe even check-out depending on the property. Now, the total inclusive price must be shown before you pledge your credit card for a reservation deposit or pre-pay in full. (Whoever prepays in full needs their heads examined. Not much recourse when the dumpster, or worse, restaurant-exhaust-fan view room has bed bugs and the housekeeping department went on strike.) The trend line is clear. Yes, the resort fee will be dead soon. But is it dead in 2012 or 2013? Unlikely, as long as there are properties which feel a need to lie in their advertising. Just like with people, when a property loses it trust with me by lying or cheating, I write them off. I know enough honest people and lodgings. Don’t need to waste my time with others. MarkKelling I recently stayed at a Marriott where there was a $25 daily resort fee (plus taxes). The fee included internet access (normally $15 a day) and one drink at the bar (normally $10). It also included long distance calls both domestic and international (1 hour per day total) and a daily exercise class and a “local culture” class. And you got 25% off any food purchases at any of the resort restaurants. OK, sounds reasonable at first. If you just drank your one drink and used the internet you break even. But, with the current level of frequent stayer I am with Marriott I get free internet at all of their properties anyway. And I don’t drink bar drinks at this point in time. I did eat a few meals at their restaurants, but the discounts no where came close to $25. And who uses the hotel phone to make calls? Doesn’t everyone have cell phones? So, I made my calls with the hotel phone just to show them. Oh, and the “cultural” class was stuff like basket weaving and no one was ever in attendance any of the days I was there. So, I still feel I was forced to pay for something I didn’t really get benefit for. The fee was clearly indicated in huge red letters on every web page through the entire process when I made my reservations and I did think about this before I finally reserved the stay. The funny thing is, and I think this is what the hotels are missing in many cases, I would have happily just payed $25 more a night if the rate quoted would have been that amount and thought nothing of it. As it is, being told that $25 was a mandatory resort fee made me less likely to stay there again. Jim Daniel Somewhere some Bureaucrat, or someone close to them got slammed with these fees, by a hotel that would not back off of them, and at a stage where it was coming out ot their own pocket, not ours. Bill___A The problem is that you are forced to pay the “resort fee” whether you use these things or not. That’s the problem. If the resort fee was so popular and regarded as a good value to guests, they would not have to force people to pay it now, would they… Forcing people to pay for something they may or may not need is immoral. There shouldn’t have to be a law against it, but I guess there should be. Miami510 Deceptive type advertising has been around since….. forever. Maybe FTC rules will help, but it’s never eliminated it in the auto industry… “Yes, but that price doesn’t include the motor… did you want a motor?” (that’s a joke) What’s not a joke is the delivery charges, prep charges, something called a “fleet charge,” which turned out to be their charge for storing the car until it’s sold.. I was recently charged $2. for use of the safe at a motel in Georgia. I protested and they removed the fee.. A bit of levity: A couple is check out and they see a charge of $25 as a spa fee. When the man protests saying he didn’t even know there was a spa. The manager says, “The charge stays on the bill… the spa was available and it was your choice not to take advantage of it.. The guest sat down and wrote out a bill that said, “For my wife’s services…… $25.00” and handed it to the manager who protested. The man said, “She was available and it was your choice not to take advantage of her.” KarlaKatz Put simply: I will not stay at a property with mandatory resort fees. Who wants to swim in a public urinal anyway? bodega3 Ha! But that gives me an idea for charging to reclean the room after I check in. Even in the better hotels, I end up cleaning the mold off the bathroom ceiling along with wiping down the back of the bathroom door. JenniferFinger Hidden fees aren’t “dead” until hotels, resorts, et al take it upon themselves to stop charging them-or at least to announce them up front. Which they won’t unless they are subject to laws with very sharp teeth in them. JenniferFinger Not all pools or beaches are “public urinals.” Don’t tarnish the clean ones with the same brush as the dirty ones. TonyA_says That’s how I feel, too. Anything that is MANDATORY (i.e. resort fee, fuel surcharge, etc.) must be part of the rate and must be disclosed that way upfront. TonyA_says That credit card convenience charge is also present for some European low cost carriers. I believe Australian carriers charge it, too. http://www.facebook.com/judyserie.nagy Judy Serie Nagy Are they dead? Don’t know yet, do we? It’s a rather shameless gouging situation, I always refuse to pay them when I check out. Hotels rake in lots of money from the business traveller who a) doesn’t notice or b) doesn’t care. But the rest of us sure notice! Last fall at a major chain hotel in Lyon, France, $1 per day was added on to my bill for the hotel’s “foundation”. Can they get any more creative? It’s disgusting that the government has to waste time policing this stuff when the hotels should just do the right thing and state their room rate. Values, morals and ethics … an antique concept but still alive in some of our brains. oldpro “…a fee by any other name…” will still pop up in some form or other, I’m sure… Jeanne_in_NE Dang, Tony, you sure know how to brighten up a gal’s day. #irony KarlaKatz Well, I will admit, in the land of unicorns and gorgeous-and-hot elf princes, the pools were flawless. Tom Bizzell These fees are certainly taxable. I just got back from Keystone Co. $15 per night resort fee * 5 nights is $75. I got charged $89.05 TonyA_says LOL, I haven’t even started bringing up Max Keiser’s stuff http://rt.com/programs/keiser-report/ or Elizabeth Warren’s (now that she is MASS Senator-Elect). mb99fairfax This story reminds me of a Groupon I saw the other day for the Prince Resort in Myrtle Beach – Ocean View for $49/night (Value $90). Looked like a good deal until you read the small print and found that in additional to the money you paid Groupon you would also owe the hotel a $30 check-out fee and have to pay a 25.44% tax… ouch! Charles B Assuming of course the extra “taxes” were delivered to the appropriate municipality and not used as an excuse to charge you another $14 for their own pockets. TonyA_says They need to change their name to Pileon TonyA_says Hey, care to share how you bring Chlorox Bleach with you? I need to tell my Mom and my Wife about you. You are definitely on the same bandwagon :=) bodega3 I use a washcloth and I travel with Wet Ones so with both I can clean up what housekeeping doesn’t seem to notice. As you know Tony, in our business we get to stay in some nice places. It doesn’t seem to matter 3 star, 4, star or 5 star, housekeeping isn’t doing their job! Carpets are my other bain. If yous stay in hotels in ski areas and walk around the room in white socks, you can see what is on the carpet as it is now on your socks. I can go on and on about hotel housekeeping! jpp42 Australian carriers usually call it a “credit card processing fee” or something similar which at least describes it properly. And the Australian consumer regulator (ACCC) is cracking down on airlines that charge more than the reasonable cost of the credit card facilities (Qantas, for example charges $25 on international flights, regardless of ticket cost). y_p_w Before you book, there’s usually a warning about resort fees with a range that the fee may be. Still – it sort of makes it tough to compare since you’re not bidding on a full price where you’ve got that full disclosure of the total costs. I even remember once we booked a pretty nice resort hotel on Maui via a Priceline bid. They actually had a “voluntary” resort fee once we got there. However, everything covered by the resort fee (parking, two drinks, pool towels, free local calls, two bottles of water) was included for those who booked directly through the corporate website. We could have opted just for the parking fee, but it was a $5 difference and other stuff was actually pretty nice. Still – you’re sort of left wondering what is and isn’t covered. http://flyicarusfly.com/ Fly, Icarus, Fly I’m not disputing the existence of the credit card fee. Yes, it’s evil, but at least I understand that I’m defraying an extra cost borne by the company. But for them to want to charge the same fee for me to come down to the their office and pay cash leaves a bad taste in my mouth. Better they call it a “ticketing fee” or whatever. Don’t tie it into a credit card and then make up another reason when I want to pay cash… Grrrrrr. Nikki omg, thanks Tony for the healthy dose of chuckle…!! Irony, indeedy.. Eric H That’s the representative’s job, to defend their companies actions. Companies know exactly what they are doing when they charge these fees. However, as long as occupancy rates don’t decline, nothing will change. People in general have turned into sheep and just accept whatever is happening. emanon256 My wife and I go to the same Ritz every year, and we have always loved the fact that they don’t charge a resort fee and we get access to everything. We thought it was a grate value, and the price is always reasonable because we go during the off season. This year we were unpleasantly surprised when we were booking. Not only did the rate go up $80 a night over last year, but on our final page with our total, a message was displayed stating we would be charged an additional $30 a night resort fee upon checkout. I have seen many hotels not display the resort fee until the checkout page, but they add it into the total price before the booking is complete, just like in the OPs case. But showing a total price and adding the resort fee later just seems deceptive. How many people will think that it is already included in the price? If I didn’t re-read it, I would have thought that. I guess the Ritz is not as classy as I thought. I called the GM as we have gone for years and they know us, and I complained about the fee and the steep price increase. He said they just did a $10M renovation and adding the resort fee was the only way to recoup that cost. As for the price increase, he said demand has really increased during the off season. He did agree that the way the fee is being charged is deceptive, but he said that is how Marriott’s website makes them do it and he would ask Marriott Corporate about it. Crissy Really, a “terrific value” that’s how I always classify an undisclosed fee. or NOT pauletteb With Acadia National Park as a backdrop, why anyone would pay a “resort fee” at a Bar Harbor hotel is beyond me. While the water at Sand Beach is admittedly chilly (and not for the faint of heart), a hike on one of the parks myriad trails will give you a far better workout than any excercise room. Fortunately, there are plenty of hotels in the area that don’t pad their bank accounts with such fees.