Federal officials are proposing a ban on one of the most frustrating aspects of hotel stays: being charged misleading resort fees at checkout.
The ban is part of a larger initiative unveiled by President Biden last week to prevent businesses from charging consumers so-called “junk fees,” or hidden fees that companies sneak onto a customer’s bill, often with little explanation as to what services the charges are for.
“Research shows that without realizing it, folks can end up paying as much as 20 percent more because of hidden junk fees than they would have paid if they could see the full price up front and compare it with other options. It’s wrong,” Biden said during remarks at the White House last Wednesday, according to Reuters.
Resort fees, sometimes also called “destination” or “amenity” fees, are some of the most notorious hidden charges in the travel industry. They’re mandatory fees charged on a per-room, per-night basis that suddenly show up on a hotel guest’s final bill, resulting in an unpleasant surprise for many vacationers at checkout. Hotels say the charges cover a broad range of services provided to guests, such as access to a resort’s gym, free Wi-Fi, local phone calls, and sometimes complimentary equipment rentals like snorkel gear at beachfront properties.
Depending on the length of a vacation and the type of resort, the fees can add hundreds of dollars to a traveler’s tab. The average resort fee is $42.41 per night, according to a recent study from NerdWallet, but on the higher end of the spectrum, they can reach $90 per night or more. The charges are lucrative for the hotel industry, which makes nearly $3 billion a year off of them, according to a 2018 study by lodging industry researcher Bjorn Hanson.
The Federal Trade Commission is in charge of writing the proposed ban and approving the new rule. “By hiding the total price, these junk fees make it harder for consumers to shop for the best product or service and punish businesses who are honest upfront,” FTC Chair Lina M. Khan said in a statement. “The FTC’s proposed rule to ban junk fees will save people money and time, and make our markets more fair and competitive.”
