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FTC Declines to Act on ‘Deceptive’ Hotel Resort Fees

SmarterTravel

Should hotels be required to disclose all fees associated with their nightly booking rates? And in particular, should hotels be forced to publish resort fees—which can increase the price of a room night by as much as $100—when the fees are mandatory, not optional?

For the great majority of travelers, and for consumer advocates, the answer is an unqualified yes. For the Federal Trade Commission, however, the answer is no.

For an organization whose motto is “Protecting America’s Consumers,” that’s surprising, and particularly so given the FTC’s last opinion on the issue, in 2012.

The Federal Trade Commission has warned 22 hotel operators that their online reservation sites may violate the law by providing a deceptively low estimate of what consumers can expect to pay for their hotel rooms… Consumers are entitled to know in advance the total cost of their hotel stay. So-called ‘drip pricing’ charges, sometimes portrayed as ‘convenience’ or ‘service’ fees, are anything but convenient, and businesses that hide them are doing a huge disservice to American consumers.

Related: 9 Worst Hidden Travel Fees

Fast forward to today, and the FTC is singing a different tune. According to the Los Angeles Times, the Commission has declined to act on a request from TravelersUnited that the FTC require that resort fees be fully disclosed on the hotels’ own websites, as well as on third-party booking sites. “Failing to do so deceives about the true cost of the room and undermines the power to comparison shop. Too often consumers are surprised at check out when hotels demand sometimes hundreds of additional dollars in sneaky ‘resort fees.’ It’s deceptive, unfair, and wrong. The Federal Trade Commission has the power to stop this practice.”

While the FTC has the power, it apparently lacks the will. “At this time, we don’t have evidence to prove that not including the resort fee in the room rate is deceptive if a hotel prominently discloses the resort fee upfront and includes it in the total price” when a guest checks out.

That response misses the key points, that resort fees are typically only included in the fine print, if at all, and that by the time a traveler is presented with the final bill, at check-out, it’s too late to factor resort fees into his choice of hotel.

Which is exactly what the hotels intend, and what makes the practice deceptive and dishonest, per the FTC’s own finding just three years ago.

Story Update – Response from the FTC’s Office of Public Affairs

We read your recent post titled, “FTC Declines to Act on ‘Deceptive’ Hotel Resort Fees.” We wanted to clarify a few points, as we believe the LA Times article, which you referenced, did not accurately represent the FTC staff’s guidance on resort fees.

Since November 2012, FTC staff has worked with numerous industry members to ensure that their websites prominently disclose resort fees upfront and include these fees in their total price quotes.

We have consistently stated that resort fees should be clearly disclosed upfront, early in the booking process, and right next to the room rate. It is deceptive to bury the resort fee in fine print. Also, companies must add any resort fees to the total price, so that consumers know exactly what they will pay for their hotel stays before they book a room. We believe it is deceptive if consumers only learn of the resort fee after arriving at the hotel or at checkout.

To the extent that the LA Times article suggested otherwise, the reporting was inaccurate.

Reader Reality Check

Should mandatory resort fees be included in the hotels’ published room rates: yea or nay?

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This article originally appeared on FrequentFlier.com.

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