One of the most annoying trends in the hotel industry is resort fees, destination fees, facility fees… whatever you’d like to call them. Essentially these are added mandatory charges that hotels tack on to the room rate.
Why hotels charge resort fees
Hotels charge these fees for a variety of reasons:
- They’re a way for hotels to try and get more revenue without increasing the “transparent” room rate
- It works out better for the hotel than an increase in the room rate, since historically they don’t have to pay travel agents a commission on these fees
- In some areas it also allows hotels to skirt the typical occupancy tax that otherwise applies on the room rate
Hotels are largely delusional about these fees, and the Hotel Association of New York has stated that guest “appreciate the value offered” by these fees.
While I’m not generally for the government getting involved in everything, I’ve long said that I think it would benefit consumers for the government to at least require hotels to be forced to advertise all-in pricing, just as they require of airlines. I’m not saying hotels shouldn’t be allowed to charge these fees, but rather that they have to be clearly disclosed.
The good news is that we’re seeing more and more progress on this front…
DC Attorney General suing Marriott over resort fees
As I noted a couple of weeks ago, the District of Columbia Attorney General is suing Marriott over their practice of hiding resort fees.
He argues that this practice has harmed consumers, and he wants to force Marriott to advertise the true price for their hotels up-front, and also to provide monetary relief to DC consumers who have been harmed by this policy.
It was interesting that the lawsuit was specific to Marriott, and I was curious if we’d see more of this from other attorney generals and/or for other hotel groups. We now have our answer.
Nebraska Attorney General suing Hilton over resort fees
Nebraska Attorney General Doug Petersen has filed a lawsuit against Hilton, for hiding the true price of hotel rooms from consumers and for charging hidden resort fees.
He argues that Hilton’s deceptive and misleading pricing practices and failure to disclose fees has harmed consumers and violated Nebraska’s protection laws.
The suit seeks to force them to change the way they display prices, as well as provide monetary relief to Nebraska consumers, and pay civil penalties.
As he explains:
“For years, Hilton has misled consumers in Nebraska regarding the true cost of certain Hilton hotel rooms. They failed to heed warnings from the Federal Trade Commission and the mounting complaints from their own customers.”
It looks like things might finally be changing for major hotel groups, as we now have two attorneys general suing two different hotel groups. If this spreads I think hotels will have no choice but to change their practices.