MGM Grand Las Vegas
Photograph ©2017 by Brian Cohen.
Brian Cohen·
Financial
··3 Comments·11 min read

Deceptive Hotel Resort Fees: Legislation Introduced to Protect Consumers 2019

Mandatory resort fees which have been proliferating throughout the lodging industry in the United States in recent years are finally being addressed by members of the House of Representatives of the United States in the form of legislation known as the Hotel Advertising Transparency Act of 2019.

Deceptive Hotel Resort Fees: Legislation Introduced to Protect Consumers 2019

Hotel properties, resort properties, and other places of short-term lodging would be prohibited from advertising a rate for a room which does not include all required fees — other than taxes and fees which are imposed by a government entity — under the bill, which is formally known as H.R. 4489. Consumers would be assured greater transparency in that they are shown the full straightforward price of a hotel room while searching and comparing lodging options for their next trip without having to be concerned about additional costs which may purposely be initially hidden when booking a reservation. The charging of mandatory resort fees is only one of many examples of additional funds which lodging companies may choose to require guests to pay that would be subject to the enforcement of the proposed legislation.

If the bill becomes law, the Federal Trade Commission of the United States — along with the attorneys general of each state and territory — would be able to enforce this provision through the Federal Trade Commission Act.

“It is projected that in 2019, over three billion dollars in revenue alone will be collected from consumers due to these hidden fees”, according to this official press release from Eddie Bernice Johnson, who is a member of the House of Representatives who serves constituents in the 30th Congressional District in Texas. “Consumers should be able to enjoy their vacation without being ripped off and financially burdened. This bill would require that the prices advertised by hotels and online travel agencies must include all mandatory fees that will be charged to a consumer, excluding taxes.”

Co-sponsoring the bill is Jeff Fortenberry, who is a member of the House of Representatives who serves constituents in the First Congressional District in Nebraska — the same state in which its attorney general filed a lawsuit against Hilton Dopco, Incorporated on Tuesday, July 23, 2019 in a claim that the multinational lodging corporation purposely both hid the true price of hotel rooms from consumers and charged hidden mandatory resort fees for the purpose of increasing profits.

The lawsuit by the attorney general of the state of Nebraska followed the lead of the office of the attorney general of the District of Columbia, which sought a court order on Tuesday, July 9, 2019 to force Marriott International, Incorporated to advertise the true prices of its hotel rooms up front; pay restitution to consumers in the District of Columbia who paid deceptive mandatory resort fees; and pay civil penalties for allegedly violating the Consumer Protection Procedures Act of the District of Columbia.

Arne Sorenson — who is the current president and chief executive officer of Marriott International, Incorporated — defended mandatory resort fees in general and implied that they would be here to stay, claiming that the “food and beverage credit which is often equal to — sometimes a little bit more — than the fee itself” when talking about offering customers “a multiple of the cost of the fee” in terms of packages. Sorenson also compared mandatory resort fees which are charged by lodging companies to baggage fees charged by airlines.

Opposition to mandatory resort fees accuse lodging companies of purposely misleading guests by not ensuring that those fees are clear and up front; and rather are designed to be deceptive by confusing consumers and distorting the actual price of the hotel room — and yet proponents of the nefarious charge not only defend them, but also justify them by listing mostly useless products and services from which the guest “benefits”…

…and even worse is that mandatory resort fees continue to increase. As one example, Aria Resort & Casino, Bellagio Hotel and Casino, and Vdara Hotel and Spa — which are all properties of MGM Resorts in Las Vegas — increased the mandatory resort fees which they charge guests from $39.00 per night to $45.00 per night effective as of Thursday, August 1, 2019.

Past Unsuccessful Legal Attempts in Fighting Mandatory Resort Fees

Claire McCaskill wrote this letter on Thursday, July 16, 2015 to Edith Ramirez — who is now the former chairwoman of the Federal Trade Commission — in a failed effort to encourage the government agency to put an end to the practice of mandatory resort fees in the lodging industry using its existing broad authority to prevent unfair and deceptive advertising. Inaction from the agency prompted McCaskill — who was a Democratic senator of the United States who represented the state of Missouri and a former chairwoman of the Subcommittee on Consumer Protection, Product Safety, Insurance, and Data Security — to introduce legislation prohibiting management of hotel and resort properties from charging resort fees on Friday, February 26, 2016 specifically designed to be initially hidden from the consumer; requiring disclosure of said resort fees; and include the full cost of a stay in the room rate.

I reported in this in-depth article on Wednesday, November 28, 2012 pertaining to the proliferation of resort fees when the Federal Trade Commission of the United States finally announced that it was taking action against the practice of hotel properties — including those of Marriott International, Incorporated — to charge undisclosed mandatory resort fees to its guests.

As a result of its investigation, the Federal Trade Commission — a division of the United States government charged with protecting the American consumer — had warned 22 hotel operators that their Internet reservation web sites may violate the law by providing a deceptively low estimate of what consumers can expect to pay for their hotel rooms. “Consumers are entitled to know in advance the total cost of their hotel stays,” said Jon Leibowitz — then the chairman of the Federal Trade Commission — in this release by the Federal Trade Commission, at which a copy of the warning letter in portable document format is included. “So-called ‘drip pricing’ charges, sometimes portrayed as ‘convenience’ or ‘service’ fees, are anything but convenient, and businesses that hide them are doing a huge disservice to American consumers.”

The Bureau of Consumer Protection of the Federal Trade Commission of the United States issued this report on Thursday, January 5, 2017 which concluded that “separating mandatory resort fees from posted room rates without first disclosing the total price is likely to harm consumers.”

Unfortunately, neither lawsuits nor petitions nor boycotts nor intervention by the Federal Trade Commission of the United States have helped to control the proliferation of mandatory resort fees — at least, not yet, anyway.

Readers of The Gate Already Reporting Successfully Reclaiming Resort Fees They Paid

As I originally wrote in this article pertaining to how to reclaim the mandatory resort fees hotel guests were forced to pay on Sunday, June 16, 2019, “You only need to spend as few as 60 seconds worth of your time and effort to likely reclaim the mandatory resort fees which you paid when you stayed at a hotel or resort property which had the audacity to charge them.” Simply contact the attorney general in the jurisdiction in which you reside or the jurisdiction in which the mandatory resort fee was charged. Links to the attorneys general is included in the aforementioned article for your convenience; but whether or not only customers who are based in the United States can qualify to place the request — as well as a sample letter for best results — has not yet been included in that article.

According to this comment posted by Ollie — who is a reader of The Gate — success in reclaiming a paid mandatory resort fee was relatively fast and easy: “Wow. That was quick. I received a call from the hotel today (that’s within seven days of filing!) offering a refund. I’m very impressed this worked. I told her I was grateful, but that the main reason I filed was to protest against the industry practice of resort fees. It sounded like I wasn’t the first person to say this. Hopefully enough people will do this to make a difference in their practices. Thanks again Brian for suggesting this.”

Similar success of reclaiming a paid mandatory resort fee was achieved by Mike, who is also a reader of The Gate: “I just did this recently and successfully got $100 back for 2 nights at the Venetian.”

If you have been forced to pay mandatory resort fees at a hotel or resort property, please refer to this article pertaining to how you can possible reclaim that money.

What Hotel Properties Should Do With Resort Fees

Resort fees which are charged by lodging companies should be optional rather than mandatory.

See also

In fact, a hotel or resort property can be creative with marketing extra products and services. How about customers either choosing from several packages or selecting items to build their own packages, of which they would be more than happy and willing to pay the extra money?

Either way, those packages must contain items of value — not a newspaper which the guest must fetch at the front desk, or local calls using the telephone in the room.

That would be so simple and present a win-win situation for both the consumer and the hotel or resort property — but then, ensuring that the resort fee was optional instead of mandatory removes the ability to advertise a falsely deceiving lower room rate while simultaneously denying paying some of the commission to online travel agencies which send business their way.

Summary

Fees which are optional would not be subject to enforcement under the bill — of which a section-by-section summary is provided — if it were to become law.

No matter how euphemistically they are marketed or explained, mandatory resort fees and their brethren are simply deceptive at best to consumers who are price conscious and seeking value for the money they pay to stay in a hotel room. Mandatory resort fees thwarts the efforts of consumers to truly compare room rates between competing hotel and resort properties.

Frankly, I find the necessity of legislation to reduce or eliminate a bane on consumers of lodging products and services to be a shame. All lodging companies had to do was either increase the room rates by the amount of the mandatory resort fees which were being charged to guests; eliminate the mandatory resort fees altogether; or at least ensure that resort fees were optional and not mandatory. Are the members of management of lodging companies so desperate for money that they must resort — pun intended — to deliberate deception of their customers?

I typically do not believe in government intervention; but the scourge of mandatory resort fees has not only gone on for way too long a period of time, it has also been spreading quickly to additional hotel and resort properties like a contagious disease. I wholeheartedly welcome the legislation and hope that it is voted into law, as consumers who use lodging facilities when they travel need protection from being bilked out of additional funds — and they should not have to completely scour the fine print every single time they book reservations.

That I vehemently oppose the implementation of mandatory resort fees, facilities fees and now destination fees is no secret to you if you have been a reader of The Gate for years — they should either be optional or eliminated altogether — and I will just let this extensive body of work over the years pertaining to mandatory resort fees speak for me…

Photograph ©2017 by Brian Cohen.

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