FX Excursions

FX Excursions offers the chance for once-in-a-lifetime experiences in destinations around the world.

Resort Fees Under Fire From FTC

Jan 16, 2017
News

Resort fees, the thorn in the side of many travelers, have recently come under scrutiny from the federal government.

The Federal Trade Commission’s Bureau of Economics released a report on resort fees that broke down how hotels that do not include the fees in the price of rooms are wasting travelers’ time and effort.

“This analysis finds that separating mandatory resort fees from posted room rates without first disclosing the total price is likely to harm consumers by increasing the search costs and cognitive costs of finding and choose hotel accommodations,” said Mary Sullivan, the report’s author. “In this situation, a consumer’s choice is either to incur higher total search and cognitive costs or to make an incomplete, less informed decision that may result in a more costly room, or both. The analysis finds that separating resort fees from the room rate without disclosing the total price is unlikely to result in benefits that offset the likely harm to consumers.”

The report analyzes ways travelers have to search through hotel websites before being able to see the resort fee and how much the total cost for accommodation would be. Many hotels use drip pricing to hide resort fees by advertising one price and then adding additional costs as travelers continue the buying process. Partitioned pricing divides the price of the room into multiple components without disclosing the total.

Many travelers have complained because of the inaccurate room rate the fee presents, as well as the confusion of what the resort fee is paid toward.

According to Travelers United, a non-profit consumer group, in 2015, travelers in the United States paid $2.04 billion in resort fees, a 35 percent jump from 2014.

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