By Steve Shur
What if you went to a retailer and purchased a TV, were told how much the extended warranty costs and then were informed that you MUST purchase the extended warranty, whether you wanted it or not? Requiring consumers to pay for services that they may not want or won’t consume is patently unfair.
This scenario is playing out in many hotels across America. Mandatory Resort Fees, disclosed to the consumer at the time of booking but not included in the room rate, are a recipe for consumer deception. The trend of hotels reducing the advertised room rates and tacking on a mandatory resort fee at checkout is often problematic for consumers, especially those who choose to book hotels on online travel agent sites and through metasearch platforms. Consumers don’t appreciate being told the room rate is one price at booking and then being informed that they owe an additional $25 per-day resort fee at checkout.
Hotels justify these fees by telling you that they cover the pool, fitness center and other amenities on the property. But what if you choose not to use these amenities?
Hotels have been moving toward charging mandatory resort fees at an alarming rate. Their motivations for doing so include reducing the advertised nightly rate, which may rank their rooms higher on search results that are pre-sorted from lowest to highest price. In most places, it also reduces their tax burden to states and municipalities, as resort fees are often not taxed or not taxed at the same rate as the room itself. A lower advertised room rate also reduces the commissions owed to travel agents.
But perhaps the most significant issue is that hotels that choose not to engage in the deceptive practice of charging mandatory resort fees are left with no other option but to do so. They are put in the difficult position of having to remain competitive with other hotels in their markets that are artificially reducing the room rate and supplanting that reduction with the mandatory resort fees. This creates a “race to the bottom” when it comes to consumer deception.
The FTC sent letters to hotel operators in 2012 requiring disclosure of these fees. While disclosure and transparency is important for consumers, no amount of disclosure can fix this bait and switch pricing problem. The only real solution is to end the practice of charging mandatory resort fees altogether.
