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Consumer advocates make hotel fees federal issue

publication date: Aug 31, 2012
author/source: Barbara De Lollis, USA TODAY


By Barbara DeLollis, USA TODAY
On the heels of the news that the hotel industry this year is expected to collect a record $1.95 billion in add-on fees from guests, consumer and business travel advocates say it's time to complain to the federal government about this form of unfair pricing.

Consumer advocate Ed Perkins and Business Travel Coalition chairman Kevin Mitchell have complained to the Federal Trade Commission about fees such as the controversial "daily resort fee, Perkins writes in his column in the Chicago Tribune.

Their message, he says, is simple: "Stop hotels from hiding part of their true prices from consumers and business travelers."

Consumer advocates:

Time to make hotel fees a federal issue

By Barbara De Lollis, USA TODAY

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Fees that are tacked on at check-out time by various hotels in the USA for "housekeeping," "bell captain" and "Internet access" are examples of what the FTC calls "drip pricing," Perkins says.

He explains it this way: A hotel that wants to charge $200 a night might advertise a nightly rate of $170 and then charge guests $30 extra in "mandatory" fees to make up the difference.

If you've been surprised by a fee at check-out time, Perkins says you can file a complaint to the FTC and specifically mention "drip pricing." If you don't mind the fees and think they're fair, you can tell the FTC that, too, he says.

Hotel Check-In's hotel-fee poll: 3,800 respond

Hotel fees are clearly a hot-button issue for Hotel Check-In readers.

Some of you may remember Hotel Check-In's poll last year at the bottom of a hotel-fee story (in which I mentioned the $10 resort fee we'd paid at a Great Wolf Lodge). The poll asked, "How do you respond when you discover your lodging charges a daily resort fee?"

The poll generated a whopping 3,835 votes. Of those votes, 63% said they advise others not to stay at that property while another 24% said they complain at check-out time.

Bottom line: The overwhelming majority of readers hate paying extra fees at check-out time. They want to know the true cost of staying in a hotel up front.

Impact of hidden fees

The fees have real impact on consumers, taxpayers and the travel industry, including hotels, Perkins writes. Examples from his column:

* The hidden fees prevent consumers, corporate travel managers and travel agents from doing accurate side-by-side comparisons of multiple hotels.

* Local taxing authorities miss out on potential tax revenue because they collect taxes only on the room rate vs. overall rate.

* Travel agencies similarly miss out on commission revenue, since they're paid a portion on the advertised room rate vs. the actual rate.

* Finally, the hotels that fairly depict their true per-night rate likely lose some customers since their rates appear higher vs. hotels that use the "mandatory fee" pricing scheme.

Precedent for FTC to take action

Perkins says there is precedent for the government to weigh in and require hotels to include fees in their posted prices. He writes:

The U.S. Department of Transportation prohibits airlines from carving out part of the true fare into phony "fuel surcharges" and such; the Florida attorney general forced cruise lines to abandon carving phony "port charges" out of their featured rates, and the Federal Trade Commission took action against a tour operator that was carving out a phony "tax and service" charge.

"Our principle is simple: If consumers have to pay it, hotels should include it in their posted prices," he writes.

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