FTC Going After Hidden Resort Fees
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Federal Trade Commission Chairwoman Edith Ramirez has called on Congress to draft new legislation to protect consumers from hidden hotel resort fees.
The legislation would ostensibly relieve the agency from investigating hotels and resorts on a case-by-case basis, according to the Los Angeles Times.
At issue are the resort fees that hotels sometimes charge but do not advertise up front. These so-called "daily resort fees" then show up on the bill upon checkout.
Ramirez asked for the legislation in a letter to 10 U.S. representatives, telling the congressmen that while her office has sent numerous warning letters to hotels, “In my view, however, the most efficient and effective means to mandate the type of industry-wide requirement you propose would be through legislation,” she wrote to the members of Congress, according to the Times.
A spokeswoman for the American Hotel and Lodging Assn., a trade group for the nation’s hotels, told the Times that the number of hotels that charge mandatory resort fees is on the decline — only 7 percent of all hotels in 2014 — and those that do so disclose the fees clearly.
“The lodging industry provides guests full disclosure for resort fees charged upfront,” Rosanna Maietta, a spokeswoman for the group, told the paper. “Those fees, in addition to the base travel and hotel charges, remain transparent whether consumers book online or with the hotel directly.”
But a poll commissioned by Travelers United, a non-profit group, found that 80 percent of consumers want resort fees included in advertised pricing so that they can comparison shop. And, according to USA Today, 87 percent said they would be less willing to stay at a hotel or resort that charged a fee for activities or amenities they did not use.
Quite often, the "daily resort fee" is an umbrella fee that includes usage of hotel Wi-Fi or pool for instance, that may or may not be used by hotel guests.
Last year, U.S. hotels were projected to make a record $2.47 billion from fees and surcharges, according to a study by New York University's Tisch Center for Hospitality and Tourism.
"When they advertise the room, if it's mandatory, if there's no way you can wiggle out of it, you have no choice, it's not an option, it must be included in the room rate, otherwise it's misleading and deceptive," Charlie Leocha, co-founder and chairman of Travelers United, told USA Today.
In part, this was initiated by Sen. Chuck Grassley (R-Iowa), who first called on the FTC in May of 2015 to investigate certain online hotel reservation websites. Grassley wrote a letter to the FTC asking Ramirez to investigate the sites because of hidden booking fees that "push the price of the hotel room beyond what the actual hotel would charge."
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