Hotel resort fees have drawn the ire of attorneys general 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 travel websites that help book the hotels.
Booking.com, one of the world’s largest online travel agencies (OTAs), 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 booked through the site.
The move comes only a month after attorneys general for D.C. 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 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,” 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 before the end of the booking process,” said Rosanna Maietta of the American Hotel & Lodging Association. 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 past 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 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 may give consumers the false impression that a hotel is much cheaper than it is.
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 websites — but often only in small print and late in the booking process.
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.
Booking.com is the most popular of the online travel sites operated by Booking Holdings, which also owns Priceline, Kayak, Agoda and other sites. Company representatives say they are considering charging a commission on resort fees at their other 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.
Meanwhile at Expedia
Expedia, another large online travel agency, is taking a different approach.
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 told 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.
The hotel industry fired back, saying the travel sites 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.
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.