FTC says resort fees not required on advertised rates

Back in 2012, 22 hotels received warnings from the Federal Trade Commission suggesting that by not disclosing a variety of hidden mandatory hotel fees charged to the guest they may be violating the law. Often referred to as "resort fees," these service charges (such as for the valet or gym) are mandatory, regardless of them being used. The practice was viewed negatively by the FTC and it seemed that the veil on their application would have to be lifted… at the time.

Instead, the FTC reversed this week, deciding that while airline carriers and travel agents must include all mandatory fees and taxes into the advertised price of airier, hotels are not subjected to the same scrutiny.

The Los Angeles Times reported that Travelers United, a nonprofit advocacy group approached the FTC regarding the fees, with Charlie Leocha, president of Travelers United quoted saying: "It's a very simple thing. If the fee is mandatory it must be included in the room rate."

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After the FTC's initial warning in 2012, hotels began listing additional fees in the fine print of their booking websites, but not on travel websites or other booking avenues. An analysis from Travelers United found that the use of resort fees is most common in destination locations such as Las Vegas, Mammoth Lakes, Miami and Orlando. Meanwhile, Annette Soberats, an attorney from the FTC, said the FTC does not insist hotels include resort fees in the advertised room rate.

“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,]" Soberats said.

A report released by NYU's Preston Robert Tisch Center for Hospitality, Tourism and Sports Management, and the NYU School of Professional Studies in late 2014 found that fees and surcharges were on the rise in hospitality during 2014, estimating $2.24 billion would be collected from these in the U.S. hospitality sector alone last year. Fees and surcharges predictably rise during periods of high occupancy, reflecting the strength of the hospitality sector. 

And it's no secret that guests are not fans of the practice. Another article from The Los Angeles Times, posted earlier last month, even mentioned ResortFeeChecker.com, a website designed specifically to help guests learn of the hidden fees associated with their stay. Randy Greencorn, who launched the site last fall, told The Los Angeles Times that the use of resort fees is expanding, and that his greatest frustration with them is that they are often left unrevealed until checkout.

"Anecdotally, they're definitely going up," Greencorn told the Los Angeles Times. "In Las Vegas, pretty much every hotel charges a resort fee now. The prevalence is going up, but so is the amount that's being charged."

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