News

Bipartisan Senate Bill Targets Hidden Hotel Fees

August 7, 2023

A new bipartisan Senate bill takes aim at “hidden” hotel fees and surcharges, with the goal of making them more transparent from the start..

The Hotel Fees Transparency Act, a bill introduced recently by Sen. Amy Klobuchar, D-Minn., and Jerry Moran, R-Kan., aims to make hotels disclose resort fees and other fees and surcharges up front. The bill also gives the Federal Trade Commission the ability to pursue violators, and enables state attorneys general to bring civil action against hotels that don’t clearly show the final price to customers before they hit the final screen — or check out after their stay.

“Too often, Americans making reservations online are being met with hidden fees that make it difficult to compare prices and understand the true cost of an overnight stay,” Sen. Klobuchar said. “This bipartisan legislation would help improve transparency so that travelers can make informed decisions.”

The idea isn’t a new one. In fact, President Biden addressed the issue during his State of the Union address in February, though his scope was much broader than just hotels. He called for businesses from banks, airlines and concert ticket providers, to TV/phone/internet service providers and hotels, to make the total cost of their services more transparent from the start.

But he did call out hotels specifically: “We’ll ban surprise ‘resort fees’ that hotels tack on to your bill,” Biden said. “These fees can cost you up to $90 a night at hotels that aren’t even resorts.” While the average hotel resort fee is $26 per night, according to the American Hotel and Lodging Association (AHLA), it can add up. Consumer Reports found that resort fees came to $2.9 billion in 2018.

See also MPI’s Meetings Outlook for Q3

Are Hidden Fees Really a Problem?

Not really, according to the AHLA. As long as the amenities are “worthwhile,” 80% of those surveyed in a recent poll commissioned by AHLA didn’t mind the fees. In addition, 83% of recent hotel guests said they were satisfied with the transparency of their room charges and other fees. With one exception: mandatory short-term rental cleaning fees, which more than half said were “excessive” and 68% objected to paying.

“AHLA’s most recent data shows only 6% of hotels nationwide charge a mandatory resort/destination/amenity fee, at an average of $26 per night,” AHLA President and CEO Chip Rogers said in a statement. “These fees directly support hotel operations — including wages and benefits for hotel staff — and when they are applied, hotel websites clearly and prominently display them for guests during the booking process, in accordance with FTC guidance.”

While the new Senate bill is the latest salvo in the “hidden hotel fee” war, it isn’t the first. In fact, a similar bill, Hotel Advertising Transparency Act of 2022, was introduced in the House last summer and doesn’t appear to have made much progress since.

In the meantime, consumers who aren’t happy with the level of fee transparency in the hotel booking process have been taking to the courts. One hotel company is facing a lawsuit filed in Los Angeles earlier this summer by hotel guests that say its “Hotel Worker Protection Ordinance Costs Surcharge” — which was put in place after the city enacted the Hotel Worker Protection Ordinance designed to guarantee fair pay, reasonable workload limits and protections again sexual or other assaults — was “unfair, deceptive, untrue and misleading” because the fee “far exceeds the costs of compliance” and is a “junk fee under the guise of ‘worker protection,’ directly benefiting [the hotel company] at the expense of their guests.” The suit is ongoing as of this writing.