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Surprise Fees Are A Last ‘Resort’

Regardless of how you feel about surprises in general, there’s one place you never want to encounter one: a hotel bill upon checkout.

Unfortunately for travelers, that experience is becoming more common as a small but growing contingent of properties add mandatory “resort fees” tacked on to a room’s base price.

Visitors to Las Vegas casinos and beachfront properties in places like Hawaii and South Florida have largely become resigned to such nonsense. It’s still rare overall – about 4 to 7 percent of U.S. hotels charge resort fees, according to the American Hotel and Lodging Association – but the practice is on the rise. These fees are now also turning up at properties that no reasonable traveler would think of as a resort. Fees and surcharges at U.S. hotels have been estimated to total $2.7 billion for the year overall. (Such mandatory fees are largely banned outside North America.)

Resort fees, sometimes rebranded as “daily service fees,” typically piggyback onto each night’s stated room rate. Hotels point to a range of amenities funded by these fees, from water bottles to in-room Wi-Fi to usage of the gym or the pool. But for the most part the guest’s intention to use any of these services – or not – is irrelevant. Since the fee is mandatory, it doesn’t really matter what the hotel claims it covers.

Hoteliers generally argue that they disclose these fees when consumers book with them directly, and that they cannot be responsible when travel search engines or deal sites do not communicate the fees clearly. But this flimsy argument does not hold water (bottled or otherwise). After all, sites like Kayak or Expedia have a vested interest in providing accurate information to allow users to compare properties; that service is what their whole business model relies upon. It is the hotels themselves who benefit from artificially lowering the advertised room rate by hiding mandatory fees in the fine print.

It’s really very simple: If a resort fee – or a “facilities fee” or a “concession fee” for rental cars – is optional for the consumer, a vendor should be allowed to list and charge it separately. Anything else is deceptive. If I have to pay for the hotel’s Wi-Fi even if I choose to use the data plan on my mobile device instead, that charge is just part of the room cost and should be disclosed as such.

To add insult to injury, some hotel loyalty programs (including Marriott’s) reportedly do not grant points on resort fees, only on the base room rate. As more than one annoyed traveler has pointed out, this behavior simply salts the wound of a fee-inflated daily rate.

When and where will these practices end? When hotels start being fined and sued, if they don’t have sense enough to see the writing on the wall. Pointing fingers at third-party booking sites, or claiming to have “disclosed” the fees at checkout or in a website’s fine print, is not an answer. Why should honest businesses that disclose their actual prices suffer from unfair competition from lowballing competitors?

Consider how this scenario has played out for airlines. If ticket prices don’t include fees for baggage or assigned seats, and consumers actually have the right to decline such services, these fees are annoying but kosher. If ticket prices are quoted before a mandatory baggage fee is added, regardless of whether the consumer wants to bring a bag, they are... well, not kosher. Even airlines, which are generally far from averse to irritating their customers, are smart enough to know this. We shouldn’t give them too much credit, however, since the Transportation Department ordered in 2012 that they include all mandatory taxes and fees in published airfares.

According to The Wall Street Journal, attorneys general in 46 states and the District of Columbia are investigating the way hotels advertise and charge resort fees. And not long ago, the Federal Trade Commission seemed poised to require hotels to include such fees in their advertised prices, sending warning letters to that effect to 40 hotel operators in 2012 and 2013. But if the FTC still has an appetite to take on resort fees, it is not evident to outside observers; there has been little movement since it released a report condemning the practice earlier this year. Until the FTC takes concrete action – or until a court declares the fees as currently charged are illegal – such deceptive add-ons are likely to keep multiplying.

For now, travelers cannot do much other than keep an eye on the fine print, especially when booking through a third party, and perhaps check their destination on ResortFeeChecker.com when attempting to avoid hotels that charge them. Though a few persistent travelers report negotiating their way out of fees at the property itself, this outcome is rare, and most people will be better off booking away from places that charge such fees if alternatives exist. With any luck, the courts or the FTC will step in and end mandatory resort fees before they spread too far.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us,” and Chapter 4, “The Family Business.” Larry was also among the authors of the firm’s book The High Achiever’s Guide To Wealth.

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