While the focus has been on airlines, they aren’t alone in relying increasingly heavily on fees and surcharges to bolster their top and bottom lines.
According to a report by the NYU School of Professional Studies, the U.S. hotel industry is on track to generate a record $2.7 billion in fees and surcharges during 2017. Not surprisingly, a significant amount of the year-over-year increase will come from a rise in cancellation fees, driven by the harsher cancellation policies imposed by the likes of Hilton and Marriott.
Those new cancellation policies have elicited groans from travelers frustrated by the industry’s focus on fee revenue. But no one is suggesting the cancellation fees are fundamentally unjust or dishonest, and there’s little or no chance that they’ll be seriously contested or rolled back.
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Mandatory resort fees are another matter. As recently as 2015, resort fees set travelers back $2 billion, according to Reuters. And that number is increasing every year, as individual hotel fees rise, and more hotels impose them.
But unlike most other fees, resort fees are not only considered annoying, they’re considered unethical. Here’s how an FTC report, issued earlier this year, describes them:
Resort fees are per-room, per-night, mandatory fees charged by some hotels. According to the hotel industry, the purpose of the fees is to provide hotel customers with certain hotel services, such as Internet access, parking, and use of the hotel’s health club. However, these services could be provided without charging separately-disclosed resort fees by making them optional to customers for additional fees or, alternatively, bundling them with the room and including the cost of the services in the room rate. By charging a mandatory resort fee, a hotel is bundling the services with the room, but is disclosing the fee for the services separately from the room rate.
The report finds that the current practice of disclosing resort fees separately from the basic room rate is misleading, and goes on to recommend that hotels include the resort fee in the advertised price.
Even before the FTC report was published, a task force of attorneys general from 46 states and the District of Columbia began reviewing the issue, and, as reported earlier this week by the legal website Lexology, “a number of owners, operators, and brands are receiving subpoenas or inquiries from other State Attorneys General relating to this task force’s nationwide investigation.”
Resort fees have been a source of irritation to travelers and the target of consumer-advocacy groups for years. With the FTC and state attorneys finally on board, the issue may now have the traction it needs to warrant the necessary and appropriate action. Two words: Full disclosure.
Reader Reality Check
Have you been dinged by a hotel’s mandatory resort fee?
After 20 years working in the travel industry, and almost that long writing about it, Tim Winship knows a thing or two about travel. Follow him on Twitter @twinship.
This article first appeared on SmarterTravel.com, where Tim is Editor-at-Large.
