Consumer advocates have long sought to eliminate resort fees, the often hidden charges hotels tack on to room rates that purportedly pay for use of amenities like WiFi, the fitness center and printing your boarding pass — for whoever is still doing that.
“When you think you’re paying one price to book a hotel, you only find out after checking out that there’s a ‘resort fee’ you never heard about that’s added to your bill,” Biden said in a speech last week announcing his administration’s effort to fight “junk” fees across many consumer industries, including airlines.
Earlier that week, the Federal Trade Commission announced it’s exploring a rule that would crack down on hidden charges like resort fees, giving the agency the ability to fine first-time violators and obtain refunds for customers.
Here’s what you need to know about resort fees and the push to eliminate them.
What are resort fees?
Resort fees originated in the late 1990s, according to a 2017 FTC report. While some high-end resorts use them as optional charges for amenities, some non-resort hotels now tack them on as mandatory, per-night, per-room charges on top of the originally advertised room rate.
Hotels argue the resort fees help offset commissions to third-party booking websites and save money for customers by bundling charges for all amenities together, according to the FTC report. Critics say the fees have little to do with the amenities provided, pointing to the fact that many hotels continued to change a resort fee when most amenities were shut down due to the coronavirus.
“The hotels have never proven that there’s a real exchange here at all,” said Lauren Wolfe, an attorney at the advocacy group Travelers United who founded the website killresortfees.com. “Because you can’t get out of the fee, it’s not an exchange of service — it’s just like a second mandatory room rate.”
According to the American Hotel and Lodging Association, an industry trade group, just 7 percent of hotels charge a resort fee, a number that has been declining in recent years.
Where are the fees hidden?
The fees are often displayed after you click to check out online, a practice known as “drip pricing” that makes it hard for customers to comparison shop, according to a 2017 FTC report on resort fees.
Jason Cochran, the editor in chief of Frommers.com, called resort fees a method of “accounting in a separate column” that allows large hotels to appear competitive with the prices of mom-and-pop hotels on online search engines.
Because resort fees are usually charged in a separate online transaction or at the front desk when you check in, they are not subject to a commission from third-party booking sites and are taxed differently in some jurisdictions, he said.
Some hotels in Las Vegas are charging $45 a night in resort fees, Cochran said. Some luxury properties tack on more than $100 a night. Hotel customers paid roughly $2 billion in resort fees in 2015, according to the FTC report.
What happened to previous efforts to combat resort fees?
The FTC sent letters to 22 hotel companies over resort fees in 2012, warning they may be violating federal consumer protection laws by “misrepresenting the price consumers can expect to pay for their hotel rooms.”
According to the American Hotel and Lodging Association, hotels responded to the 2012 letters by ensuring they “clearly disclose all fees at the start of the booking process.”
The FTC never followed up with legal action, but bipartisan efforts in Congress and at the state level have targeted the practice. Reps. Eddie Bernice Johnson (D-Tex.) and Jeff Fortenberry (R-Neb.) introduced a bill in 2019 mandating all hotel fees be included in the listed price, and Rep. Paul A. Gosar (R-Ariz.) introduced a similar bill this year.
Following an investigation into resort fees by 50 state attorneys general, the D.C. attorney general’s office sued Marriott over the practice in 2019, while the Nebraska attorney general’s office sued Hilton. Marriott reached a settlement with the Pennsylvania attorney general’s office in 2021 in which it agreed to disclose resort fees on the first page of its booking process as part of the total advertised price.
What’s Biden doing to fight resort fees?
The Biden administration and the FTC are seeking to force all hotels across the country to disclose the fees upfront, which Wolfe said would be an improvement over action taken at the state level.
“Instead of having a hodgepodge system where some states are going to likely ban this, either through legislation or lawsuits, it would make much more sense to have the FTC have one rule that applies to all of America,” she said.
Mitchell Katz, a spokesperson for the FTC, said the proposal is still in the “early stages of the rulemaking process,” and that the public are invited to comment on the advance notice of proposed rulemaking. Most proposed rules take two to three years to be implemented, according to the U.S. Courts website.
How will hotels respond?
Wolfe said she anticipates if the rule is implemented, hotels would continue to charge a separate resort fee — to be able to avoid paying a commission on it to a third-party booking service — but they would need to disclose those fees as part of the total room cost.
“I don’t think most consumer advocates or anybody else really cares if they’re splitting that up into two parts, as long as they’re advertising the total cost of the room,” she said.
Cochran said Congress would need to take separate action to eliminate the “loopholes” that incentivize hotels to charge the extra fees, even if they are displayed upfront.
“There’s still an incentive for the hospitality industry to carve off this extra money, whether it’s saving on commissions or saving on taxes,” he said. “Until there is, there’s no longer legal incentive to carve off this money and account it differently, they’re going to keep doing it one way or another.”
A spokesperson for the American Hotel and Lodging Association said the industry “looks forward” to working with the FTC and the Biden administration to “ensure that the same standards of transparency” are applied to short-term vacation rental platforms, where many listings charge hidden fees for services like cleaning.
Can you avoid resort fees?
The FTC warns customers they should call their hotel to ask about a resort fee or other charge. But most customers today book online, in part to avoid speaking to a hotel representative altogether.
According to the Points Guy, you can avoid paying a resort fee by booking an award stay with credit card or loyalty points at most hotels. The website ResortFeeChecker.com also provides information on what fees hotels charge.
Wolfe recommended filing a consumer complaint with the state attorney general’s office in both your home state and the state where the hotel is located. As a D.C. resident, she has been able to secure a refund on resort fees by complaining to the D.C. attorney general’s office, she said.
The FTC also accepts complaints over the fees on its website, Katz said.
Cochran said customers can try to contest the fees upon check in or dispute the charge with your credit card company, but because of the current lack of legal protections, no strategy is guaranteed except choosing a different hotel.
“Unfortunately until the law is truly protecting us, the only way to protect yourself is with your feet,” he said.
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