More hotels are imposing mandatory “resort fees” on their guests for amenities, and the amount of those fees is increasing at many of those hotels. Many consumers dislike these fees, even when they appreciate the value of the included amenities.
A legal battle is underway over mandatory resort fees. Back in November 2012, the Federal Trade Commission (“FTC”) sent letters to 22 hotel chains warning that the practice of disclosing mandatory resort fees only in fine print prior to the completion of the reservation process, or not at all, could be found to be unfair or deceptive and thus unlawful. The FTC reasoned that such practices misrepresent “the price consumers can expect to pay for their hotel rooms.” The FTC stated that the “most prominent figure” for prices on a hotel reservation site should “be the total inclusive estimate” which includes “all mandatory charges.” In response, many hotels changed their disclosure practices.
Since then, the FTC has not publicly taken any enforcement action against hotels alleging an inadequate disclosure of mandatory resort fees. In January 2017, the FTC’s Bureau of Economics issued a report which concluded that a hotel’s failure to disclose mandatory fees with the initial advertised base rate harms consumers, because (a) that practice increases consumers’ search time when comparing prices, and (b) consumers base their purchasing choices on a perception that the total price of the hotel stay is lower than the combined base rate and resort fee. However, the prospect of FTC enforcement action has likely faded with changes in the FTC’s leadership following the election of President Trump.
The cause has been taken up by the Attorneys General of 46 states and the District of Columbia (“State AGs”), who in 2016 began an investigation of resort-fee practices. This investigation is led by the District of Columbia Attorney General’s office, which has taken the position that mandatory resort fees must be disclosed at the beginning, not at the end, of the reservation process. The D.C. Attorney General has also stated its view that it is unlawful for a hotel to describe a resort fee during the reservation process as “mandatory” if the hotel has a secret internal policy of waiving those fees for objecting customers.
