Business

FTC Turns Eye Toward Hidden Resort Fees

Mandatory resort fees at hotels, a common gripe handled by the FTC, have gotten so bad that Congress should step in, chairwoman Edith Ramirez argued. A leading industry group, meanwhile, defended the industry's practices.

The Federal Trade Commission (FTC) hasn’t forgotten about the controversy around hidden resort fees at hotels. It now wants Congress to address the issue.

Last week, the commission’s chairwoman, Edith Ramirez, wrote a letter to members of Congress recommending that a legislative solution that would cover resort fees across the board, freeing the FTC from having to investigate complaints on a case-by-case basis. She added that such fees represented “a deceptive and unfair trade practice,” according to the Los Angeles Times.

While Ramirez says her regulatory body has focused on the resort fees by going after individual hotel chains, the strategy had limits.

“In my view, however, the most efficient and effective means to mandate the type of industry-wide requirement you propose would be through legislation,” she wrote, according to the Times.

The newspaper noted that Ramirez targeted her letter to 10 members of Congress that had previously been critical of such fees. One of those members, Sen. Chuck Grassley (R-IA) had previously called on the FTC to diligently investigate fees hidden from third-party hotel-booking websites.

The American Hotel & Lodging Association, the industry’s primary trade group, rebuked the FTC’s stance in a statement, noting that such fees are actually on the decline, with just 7 percent of hotels nationwide levying resort fees in 2014. The association says that the fees pay for standard amenities, such as pool use, newspapers, wireless access, and gym access.

“The lodging industry provides guests full disclosure for resort fees charged upfront,” AHLA Spokeswoman Rosanna Maietta told the Times. “Those fees, in addition to the base travel and hotel charges, remain transparent whether consumers book online or with the hotel directly.”

The consumer group Travelers United, meanwhile, focused on its own data regarding the hidden fee issue. In November, the group released the results of a survey that showed roughly 80 percent of respondents wanted resort fees to be included in the advertised price for a hotel room.

And the advocacy group announced Tuesday that consumers paid $2.04 billion in mandatory resort fees in 2015, an increase of 35 percent over 2014, Reuters reported.

“It gives them a way to pad their revenues by $15 to $25 per day without you really seeing that and factoring it in to what you are spending,” the advocacy group’s spokesman, Ben Hammer, told the wire service.

But hotel chains, such as MGM Resorts, were quick to defend their practices.

“Resort fees are plainly stated on our hotel reservations websites, prior to a guest making a reservation,” the firm’s Yvette Monet told Reuters. “Information about the fees is also stated by our reservation agents when a guest makes a reservation over the telephone.”

(iStock/Thinkstock)

Ernie Smith

By Ernie Smith

Ernie Smith is the social media journalist for Associations Now, a former newspaper guy, and a man who is dangerous when armed with a good pun. MORE

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