Hotel resort fees have drawn the ire of attorneys general for Nebraska and the District of Columbia as well as travel rights groups because they often aren’t disclosed upfront, making travelers think they’re getting a better deal than they really are.
Now, those fees that consumers love to hate are getting pushback from some online travel websites that help book the hotels.
Booking.com, one of the world’s largest online booking sites, has begun charging a commission on resort fees collected by hotels in Europe and plans to make the change for U.S. hotels in January. The website previously collected a commission only on the nightly rate for every hotel room that is booked through the site — a practice shared by most online booking sites.
The move comes only a month after attorneys general for the District of Columbia and Nebraska filed lawsuits against Marriott International and Hilton Worldwide Holdings, respectively, calling the fees deceptive.
Although Booking.com concedes that the move will generate extra revenue for the company, the travel site contends that the change primarily is intended to push hotels and other lodging providers to be more transparent about the total cost they plan to charge potential customers.
“We believe in complete transparency and that the best customer experience is when people know the entire cost upfront,” company spokeswoman Angela Cavis said. “Hopefully this will help continue to push the entire industry toward more transparency and fewer surprises for customers.”
Hotel industry leaders say only a small percentage of hotels charge mandatory resort fees and most of them clearly disclose the charges before rooms are booked.
“When guests choose a property with a resort or amenities fee, hotels are careful to follow [Federal Trade Commission] guidance and display fees prior to the end of the booking process,” said Rosanna Maietta, executive vice president of communications for the American Hotel & Lodging Assn. A 2018 report by the trade group found 6% of hotels surveyed charge a resort fee.
Hotels charge resort fees with the justification that they cover the use of such amenities as swimming pools, gyms and business centers, among other facilities and services. But in the last few years, more hotels and resorts have made resort fees mandatory, charging as much as $100 a night, even at properties that don’t offer extras such as a pool or a gym.
Often the extra fees are called “facility charges,” “destination fees” or “amenity fees.”
In addition to raising extra revenue, the mandatory resort fees allow hotels to advertise nightly room rates that appear to be much lower than they actually are when the fee is added. It means that travel booking sites that list hotels by order of lowest to highest price may give consumers the false impression that a hotel is much cheaper than it is with the mandatory fee.
The FTC issued a warning to 22 hotels in 2012, saying that surprising guests with hidden resort fees is deceptive and illegal. In response, the hotels began to list their resort fees on their booking websites — but often only in small print and late in the booking process, just before the guest is ready to pay.
In the U.S., hotels generated nearly $3 billion in 2018 in mandatory hotel fees, according to an estimate by Bjorn Hanson, an adjunct professor at New York University’s Jonathan M. Tisch Center for Hospitality and Tourism. The total represents an 8.5% increase from 2017, and Hanson predicts such charges will continue to rise in 2019 as hotels try to combat increasing payroll and real estate costs.
Resort fees generally run between $20 and $40 a night, although in Las Vegas, where such fees are common, three high-end MGM Resorts properties just boosted the nightly resort charge to $45 from $39, a 15% increase.
Booking.com is the most popular of the online travel sites operated by Booking Holdings, a Norwalk, Conn. company that also owns Priceline, Kayak, Agoda and other travel-related sites. Company representatives say they are considering charging a commission on resort fees in the future at the other Booking Holdings brands.
Travel rights organizations are pushing to have all hotels include mandatory fees in the advertised rate so that price-shopping consumers know what they will ultimately pay to book a room.
Charles Leocha, president of the advocacy group Travelers United, applauded the move by Booking.com and said he hopes more travel websites put pressure on hotels to include the mandatory fees in their advertised rate.
“It is a move by the largest hotel OTA [online travel agency] to strike at resort fees and take away part of the profit that hotels are making now without any commissions,” he said.
Expedia, another large online travel agency, is taking a different approach from the Booking.com model of charging a commission on resort fees.
Hotels that charge resort fees will be downgraded when the site sorts available rooms from lowest to highest price, Expedia Lodging Partners Services President Cyril Ranque recently told reporters for the travel site Skift. That means that hotels charging resort fees won’t be able to use a pre-fee base rate to give an impression of the final hotel rate.
“We believe travelers benefit when they have access to a wide variety of travel options and transparency on what they pay for hotel stays, including hotel-imposed mandatory fees,” the company said in a statement. “We continue to work with our hotel partners to make sure the fees they charge are shared with us so we can in turn clearly display them, enabling travelers to make informed decisions in their hotel selection process.”
The hotel industry fired back at the travel sites, saying they aren’t always transparent about the fees they charge customers.
“Historically, the FTC has received a significant number of complaints from consumers who booked travel through third-party websites, and then were charged additional fees that were not disclosed at the time of booking,” Maietta said.
Among the most popular travel sites are so-called aggregator sites such as Kayak and Trivago, which compile a list of travel rates from various other booking sites. They make profits from advertising, not from hotel booking commissions.
TripAdvisor, a site that does not collect a commission but instead directs users to hotel websites, said that it “believes in pricing transparency” but does not plan on making any changes to the way it advertises hotel rates.
“If the broader travel industry displays these resort fees in their initial pricing displays and supplier partners provide us and other distribution channels with this data, we would also show it as well,” the company said in a statement.
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