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Hotels' 'Resort Fees' Have Become an Unpleasant Reality,
So Much So that the Federal Trade Commission is Now Invloved

By Catharine Hamm, Los Angeles TimesMcClatchy-Tribune Regional News

Sept. 23, 2012--Question: I recently booked two nights' stay at a hotel in Las Vegas and paid for it online. Upon checking in, my husband and I were taken aback when the desk clerk told us that a resort fee of $40.32 had to be paid before we could check in. After some discussion with the online booking agencies, I received a credit for 10% of the total fee. It is really not about the money. It really is the principle. I had no choice but to pay the fee. Is this a trend, and can anything be done about it?

Mae Chandran

Malibu

Answer: It is a trend, and who will prevail in this latest battle of fee-conomics is unclear. For the time being, it may not be the consumer.

If you think airlines are bad about adding fees, say hello to their just-as-greedy sibling, the hotel industry, which, according to recent research from New York University, this year will collect $1.95 billion in fees.

You know those fees, the uninvited guest in your vacation planning budget. Sometimes they're called resort fees, even if you're not at a resort; sometimes, other things. Mostly I call them annoying.

To find out how annoying, I looked online at booking a room Nov. 21-23 at the MGM Signature in Las Vegas. The first-night rate shows up at $100 and the second at $125. Pretty good rate for this nonsmoking, no-casino hotel, no?

Not so fast, Sparky. If you click through to the second page, you find that taxes will be $27 total, which isn't as bad as some cities (and, yes, New York City, we're talking about your hotel taxes). Beneath the price on the computer screen, you see these words: "A daily resort fee of $25 (subject to applicable tax) is added to all room reservations upon check-in." What the fee-conomics? Another blurb says the fee "includes the following hotel services: fitness center access at the Signature, high speed Internet access (in-suite and public areas), free local and (800) calls, in-suite private label coffee and daily newspaper."

Excuse me, but none of these things is anything I have asked for, and some I won't be using. I carry a cellphone, and I have a mobile hot spot, so calls and Internet access are on my dime. Thanks to my print subscription, I can get the L.A. Times online. If I want coffee, I'll bop downstairs to Starbucks. If I want to be fit, I won't be in Las Vegas.

I'm not picking on the Signature; I've stayed there several times and liked it, and it's certainly not the only hotel in Las Vegas (or anywhere) that does this. But I don't have the option of saying no to the $25 a night, which means the per-night rate is really $125 and $150 a night, plus tax. (The booking page does give me the option of paying $20 for early check-in and/or $20 for late check-out, but these are not mandatory fees.)

Reader Chandran and I aren't the only ones who are irritated. Three consumer advocates who are hot under the collar about these fees sent a letter last month to the Federal Trade Commission to complain. The FTC is none too fond of a practice it calls "drip pricing"; it held a conference on the topic in May. In its promotional material for the gathering, it described drip pricing as "a technique in which firms advertise only part of a product's price and reveal other charges later as the customer goes through the buying process. The additional charges can be mandatory charges, such as hotel resort fees or fees for optional upgrades and add-ons." (It also noted that hotels weren't the only businesses to practice this.)

"What it means, basically, is that a supplier, instead of saying the price is $100, says the price is $70 plus a $30 fee, and we say that's wrong," said consumer advocate Ed Perkins, who, with Charlie Leocha, executive director of the Consumer Travel Alliance, and Kevin Mitchell, chairman of the Business Travel Coalition, sent the FTC a letter of complaint. "It's an inherently deceptive process."

Perkins is hopping mad because the fee isn't optional, unlike some that travelers might pay for an airline ticket add-on (extra legroom, for instance, or early boarding). "It's a mandatory fee; it's part of the price," Perkins said.

This price creep isn't new. "What's happened here is that the Internet and Internet buying have put tremendous pressure on travel suppliers to show a good price on that first screen," Perkins said. A hotel that's less expensive than its competitors generally captures the eye and often the reservation of a price-sensitive buyer, Perkins added, noting that some hotels do disclose those additional fees in subsequent pages, but the price on "the first screen isn't right."

In their letter to the FTC, the consumer advocates note, "It's hard to see how drip-pricing deception benefits anybody other than the suppliers that practice it."

You might think the American Hotel & Lodging Assn. would have something to say about this. Nope. Kathryn Potter, senior vice president for marketing and communications for the association, said the organization was not "legally able to" respond even though the trade organization's "role is typically to speak on behalf of the industry."

But Mitchell has a thought on what the hotel industry should do: "It is in their best interest to fix this problem...and not have government intervention."

Until then, what's a consumer to do? Some solutions from the FTC will appear in the Sept. 30 On the Spot column.

Have a travel dilemma? Write to travel@latimes.com. We regret we cannot answer every inquiry.

___

(c)2012 the Los Angeles Times

Visit the Los Angeles Times at www.latimes.com

Distributed by MCT Information Services



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