Resort Fees: An Analysis; Federal Trade Commission Takes Action

The Federal Trade Commission of the United States is finally taking action against the practice of hotel properties to charge undisclosed mandatory resort fees to its guests — an action that is obviously long overdue, according to an investigation and analysis by The Gate.
Resort fees are probably the closest activity to fraud which certain hotels implement on their guests — and it has been a problem for years. Typically, a customer finds a hotel which could double as a destination — usually calling itself a resort. The hotel charges a fee — usually per day — and bundles a list of amenities included in the resort fee such as access to a health club, a discount on dining at the premises of the hotel property, and free local telephone calls. Often, the resort fee is a mandatory charge — whether or not the guest uses the amenities — and it is often initially hidden from the consumer when shopping for lodging.
Sometimes resort fees include items usually included as part of the room rate elsewhere, such as use of the pool, newspaper, hotel parking, and use of a safe — and often elite members of frequent guest loyalty programs are not exempt from resort fees.
If all of that is not bad enough, resort fees are usually exempt from earning frequent guest loyalty program points, which would at least ease the pain of paying them — although FlyerTalk member crhptic claims to have figured out a way to earn Hilton HHonors frequent guest loyalty program points on resort fees. In fact, in many cases, you are still charged and required to pay a resort fee even though you redeemed frequent guest loyalty program points for an award stay at a hotel property — no matter in which frequent guest loyalty program the hotel property currently participates.
Consider the case of FlyerTalk member das, who was charged a daily resort fee only after booking a reservation at a hotel property in Canada for two nights back in 2000 and called the practice back then a “fraud” — but a similar occurrence happened to FlyerTalk member freebee almost exactly eleven years later.
FlyerTalk member srodr wants to know if resort fees are misleading. FlyerTalk member dAAllas wonders about the point of resort fees. FlyerTalk member Unimatrix One outright demands to “stop calling it ‘fuel surcharge’ or ‘resort fee’ and just call it what it really is.” FlyerTalk member manku questions the legality of resort fees and their implementation.
Well — in terms of legality — Priceline won a lawsuit earlier this year where the California Appeals Court ruled that it did not contravene its contract by not including resort fees to quoted rates on its Internet web site, as long as it discloses that the consumer may be charged a resort fee. FlyerTalk member hindukid advocated back in 2004 that Priceline should cover resort fees — but apparently that request has fallen on deaf ears.
How nice.
If Consumer Reports wants a scheme from which to protect consumers — and Christopher Elliott wants to legitimately expose a possible scam — perhaps they should both concentrate on further investigating the concept of resort fees. To be fair, they have done so in the past — but they need to do much more work in garnering attention to this issue. For example, Christopher Elliott wrote an article in 2006 about resort fees which was published in The New York Times, while The Consumerist — an Internet web site by the Consumers Union, publisher of Consumer Reports magazine — posted a story earlier this year about the Federal Trade Commission requested input from consumers about drip pricing, which is the concept of when a company advertises only one part of the price of a product or service while not revealing or disclosing other associated charges until later in the the buying process. The implementation of resort fees is one form of drip pricing.
As a result of its investigation, the Federal Trade Commission — a division of the United States government charged with protecting the American consumer — has warned 22 hotel operators that their Internet reservation web 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 stays,” said Federal Trade Commission Chairman Jon Leibowitz in a release by the Federal Trade Commission posted today, at which a copy of the warning letter in Portable Document Format is included. “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.”
Meanwhile, more hotel properties are joining in on the resort fee bandwagon. For example, FlyerTalk member Poppster just reported two weeks ago that Hilton Orlando began charging a resort fee of $20.00 per night.
In the 106 discussions on FlyerTalk which currently deal with resort fees as the main topic, words by FlyerTalk members used to describe their disdain for resort fees include — but are not limited to — extortion, fraud, scam, worthless, silly, and outrageous.
I wholeheartedly agree.
Rarely do I ever patronize a hotel property which charges a resort fee — unless I am absolutely receiving value for my money. In most cases, I never use the offered amenities covered by a resort fee — and so, they are worthless to me as well.
Hotel properties should earn revenue any way they possibly can. I have no problem with a hotel property charging resort fees, as long as it:

  • Clearly discloses the resort fees in advance
  • Offers real value for the price paid for the amenities included in resort fees without decreasing the benefits normally offered exclusive of a resort fee, and
  • Implements resort fees as optional, rather than mandatory

Charging mandatory resort fees after a reservation is booked is a predatory practice that is deceptive at best — and this practice needs to stop immediately. In my opinion, resort fees are a method to artificially offer — and advertise — a lower room rate. Resort fees are no different from the allegedly deceptive practices of Spirit Airlines and Ryanair, both of which are purported low-cost carriers which charge excessive mandatory fees to recover revenue lost by offering ridiculously low airfares.

  • Do not patronize hotel properties which implement a mandatory resort fee — especially if you will not benefit from it. These properties are typically found in touristy resort areas such as parts of the Caribbean, Orlando, Las Vegas or Hawaii — although they can be found almost anywhere.
  • If the hotel property does disclose that a mandatory resort fee is charged and you really want to stay there, contact the management of the property and inform them that you will not stay at their property unless they agree not to charge you the resort fee.
  • If you are informed of resort fees for the first time when checking into a hotel property, adamantly refuse to pay it. Walk out of the hotel property if the front desk agent refuses to oblige, or contact the corporate office of the lodging company of which the hotel property is branded to submit an official complaint.

Although it takes some effort, FlyerTalk members have been able to successfully avoid paying resort fees — and you can as well. There is no reason for you to be forced to pay for something you did not use — let alone be unfairly charged additionally after you already paid for it or reserved it.
Please share your experiences and stories about being the “victim” of egregious mandatory resort fees.

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