Federal bipartisan bill seeking to crack down on “hidden” resort fees

A bipartisan Senate bill has been introduced to crack down on “hidden” resort fees for hotel stays. It would establish federal guidelines for pricing transparency that have been, up until now, mostly voluntary, thus requiring anyone advertising a hotel room or a short-term rental to clearly show upfront the final price a customer would pay to book lodging.

The proposal, called the Hotel Fees Transparency Act, would make the Federal Trade Commission responsible for pursuing violations. The legislation further says that state attorney general could also bring civil action for such violations, reports NBC News.

“Too often, Americans making reservations online are being met with hidden fees that make it difficult to compare prices and understand the true cost of an overnight stay,” said Sen. Amy Klobuchar, D-Minn., who is introducing the bill with Sen. Jerry Moran, R-Kan. “This bipartisan legislation would help improve transparency so that travelers can make informed decisions.”

The introduction of the bills follows President Joe Biden’s announcement during his State of the Union address in February that his administration would target junk fees in a variety of industries, including hotels. “We’ll ban surprise ‘resort fees’ that hotels tack on to your bill,” Biden said. “These fees can cost you up to $90 a night at hotels that aren’t even resorts.”

Consumer Reports estimated that the hotel industry brought in $2.9 billion in resort fees in 2018. And in 2019, a lawsuit filed by the attorney general for Washington, D.C., alleged that hospitality giant Marriott International had collected hundreds of millions of dollars in “deceptive” resort fees, which led the company to now include fees in the total prices it displays in search results.

The newly introduced bill would reach past hotels, also encompassing online travel agencies, metasearch websites or any other site advertising hotels, motels, inns, short-term rentals or other places of lodging at nightly, hourly or weekly prices.

For its part, the American Hotel and Lodging Association says that a poll it commissioned found that hotel fees are “rare” and that 80% of visitors are willing to pay for hotels with resort fees if the amenities are worthwhile.

“AHLA’s most recent data shows only 6% of hotels nationwide charge a mandatory resort/destination/amenity fee, at an average of $26 per night,” AHLA President and CEO Chip Rogers said in a statement, as per the cited source, noting the fees “directly support hotel operations,” including wages and benefits for hotel staff.

The American Gaming Association has also defended the practice. In a recent filing to the FTC, the trade body wrote: “Changing to all-inclusive pricing would result in removal of existing amenity disclosures and could lead to consumers making assumptions about what services and amenities would be available.”

The AGA says it fears that legislation targeting junk fees could be overly broad for a hospitality industry that includes a wide variety of properties with different services. The association claims its members disclose the fees “well before you’re within the checkout range.”

“We continue to maintain that resort fees provide value,” said Alex Costello, the vice president of government relations for the American Gaming Association. “We try and make them as easy for the consumer to understand as possible. We’re following existing FTC guidance. We believe that these should remain and that this is a problem that doesn’t need to be solved.”

For the time being, it’s not clear when the Senate will consider the bill, although a congressional suggested it could pass on its own, or be attached to one of several must-pass pieces of legislation Congress will take up later this year.