Will travelers finally see some relief from sky-high resort fees? According to President Biden, the answer appears to be yes.
The president promises to eliminate hidden fees labeled as resort fees that can significantly increase hotel rates. Mandatory surcharges are imposed by many properties in an effort to make their base rates more competitive.
Last month, President Biden said, “Each year, these junk fees that businesses charge cost Americans tens of billions of dollars, straining family budgets and making it harder to pay bills, so my administration has taken measures to eliminate them.
Now the Federal Trade Commission (FTC) issued an “advance notice of proposed rulemaking” to prohibit “deceptive or unfair acts or practices with respect to fees.”
“Unwanted fees” have become a norm over the years
According The Independent, a room at Caesar’s Palace in Las Vegas tonight costs $174 at first glance. However, once local taxes and the $46 resort fee are added, the price increases by 72% to $299 per night.
Lina Khan, Chairman of the FTC, says, “Hotel resort fees first emerged in the late 1990s. In 2015, they accounted for one-sixth of total hotel revenue. That’s $2 billion a year.
“As prices rise, fees are becoming more commonplace, allowing some companies to raise effective prices without appearing to.”
The commission found that resort fees “artificially increase search and cognitive costs” for consumers.
An FTC commissioner, however, opposed the proposal. Christine Wilson said it “is based on faulty assumptions and vague definitions; ignores impacts on competition; and diverts scarce agency resources from important law enforcement efforts.
The White House said in a statement, “There is nothing wrong with a company charging reasonable additional fees for additional products or services. For the sake of personalization, companies should be free to charge more for adding mushrooms to your pizza or for upgrading you to a hotel room with an ocean view.
“However, in recent years we have seen a proliferation of ‘junk fees’ – a category of fees that serve a different purpose.
“By hiding the total price, this practice can cause consumers to pay more than they otherwise would, and it also makes it difficult for consumers to compare prices.”
Resorts aim to justify the extra fees
Caesar’s Palace in Las Vegas justifies the resort fee by saying they pay for local phone calls, fitness center access, and “high-speed Wi-Fi for two devices per room per day.”
Virgin Hotels Las Vegas, which charges $51 per night, says the resort fee covers 20% spa services, two-for-one beverages, long distance calls and “two free bottles of water.”
In contrast, other properties such as Marriott’s Grand Chateau on Las Vegas Boulevard include all taxes and fees. The hotel offers “free wireless Internet access in all rooms, villas and public areas” as well as “free access to the fitness center”.
Related: Marriott faces backlash for high resort fees, DC attorney general intervenes | Las Vegas resort fees skyrocket to $45 per night
Comments are closed.