The Resort Fee Deception

The Department of Transportation has been fining airlines and travel agencies left and right for failing to disclose fees and thus obscuring the bottom line when advertising and selling airfares. So why are hotels getting away with the same thing?

One reason might be that hotels are (with a few possible exceptions) stationary, and therefore outside the jurisdiction of the Department of Transportation. The DOT has sharpened its bite quite a bit in recent years, but some other agencies seem to be in the barking stage on this issue.

Last November the Federal Trade Commission warned what it described as “22 hotel operators” that their online reservation systems “may violate the law” by hiding resort fees and other mandatory charges. The warning letter went on to “strongly encourage” them to review their websites. Otherwise, “the FTC may take action.”

Woof, woof. One might hope for firmer language.

Imagine the local constabulary taking such a measured view: “Ma’am, talking on your cellphone while driving may violate the law and we strongly encourage you to review this activity because we may otherwise have to contemplate enforcement action against you at some future date.” (In my dreams. I got a ticket.)

It’s unclear whether the 22 “hotel operators” have straightened out their acts because the FTC wouldn’t identify them. We don’t even know if they’re individual hotels or chains. The term “operators” seems to exclude booking agents like Hotwire and Priceline, though I consider them among the worst offenders.

“This is the first time the FTC has publicly stated its position that it is deceptive for the hotels not to include mandatory fees as part of the total price they quote,” a commission spokeswoman told CNN in an e-mail at the time. “We want to give the hotel operators an opportunity to come into compliance voluntarily before naming them publicly.”

This is not the most highly principled stand for transparency, freedom of information, the public interest or consumer protection. But the warning might at least be a step in the right direction.

Because it seems eminently clear to me that there is only one plausible reason for hotels (or booking agents) to separate out and obscure a mandatory fee. They want to deceive their customers about the total price.

I’m not talking about optional fees for parking or Wi-Fi or breakfast where you can opt out if you arrive by train, don’t want to go online or prefer to eat elsewhere. I’m talking about a fee that’s tacked on to a hotel rate with no way to opt out, whether you use those alleged resort services or not.

You can be hit with this pernicious practice anywhere, but it’s endemic in Las Vegas and growing in Florida and Hawaii. If one hotel starts getting away with it, nearby hotels almost have to follow suit because advertising the real rate becomes a terrible competitive disadvantage.

So the key is to stop them all, which doesn’t seem all that radical or difficult. I can’t imagine a supermarket could get away with charging $2.50 for a head of lettuce and then adding $1 at checkout for a mandatory lettuce packaging fee. It’s so patently deceptive, so clear that the real price of the lettuce is $3.50, that you would think it would be obviously illegal.

But if you thought like that, you wouldn’t be thinking like Dolly M. Gee, a federal court judge in Nevada who ruled that the Las Vegas Sands and Venetian did not falsely advertise the price of their jointly owned Palazzo Resort Hotel and Casino in Las Vegas. Yes, the hotel charged a guest $44.80 in resort fees beyond the “grand total” given on the reservation form. But there was an asterisk and some fine print and a link … really, he ought to have paid more attention because if a merchant can trick you, it’s your fault.

Still, one has to ask, what in hell is a grand total if it’s not the grand total?

The reason I think that some of the worst offenders are the opaque booking agents — the big ones being Priceline and Hotwire — is that there is even less opportunity to detect the deception. I’m a big Priceline fan but I don’t think it’s adequate to warn people that there might be a hidden fee of $10 to $40 tacked on to the nightly rate that you thought you just nailed down.  It’s not OK to find out you’re arbitrarily and randomly being charged more, especially when you have no way to back out of the deal.

Knowing this, my daughter and I were prepared to get hit with a resort fee when we bid successfully on Priceline for an upscale hotel in the Palm Springs area. We sighed and resigned ourselves to paying an extra $25 a night. But we balked when we got there and found that the hotel had shut down half the amenities — including the spa — that were supposedly covered by the fee. After we complained, the hotel removed the fee.

And that’s the only advice I have — to squawk about the fee if you can. And wait for the FTC to grow a pair of, uh …  teeth.


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