Are travelers finally going to see a bit of relief when it comes to exorbitant resort fees? According to President Biden, it appears the answer is yes.
The president is vowing to eliminate hidden charges labeled as resort fees that can significantly increase hotel rates. The mandatory extra charges are imposed by many properties in an attempt to make their base rates look more competitive.
Last month President Biden said, “each year these junk fees that companies charge cost Americans tens of billions of dollars, weighing down family budgets and making it harder for people to pay the bills, so my administration has taken action to eliminate these.”
Now, the Federal Trade Commission (FTC) has published “advance notice of proposed rulemaking” to outlaw “deceptive or unfair acts or practices relating to fees.”
“Junk Fees” Become A Standard Over The Years
According to The Independent, a room at Caesar’s Palace in Las Vegas tonight costs $174 at first sight. However, once local taxes and a resort fee of $46 are added, the price increases by 72 percent to $299 per night.
Lina Khan, chair of the FTC, says, “resort fees at hotels first emerged in the late 1990s. By 2015, they accounted for one-sixth of total hotel revenue. That’s $2 billion per year.
“With rising prices, fees are becoming more prevalent, allowing some businesses to raise effective prices without appearing to do so.”
The commission found resort fees ‘‘artificially increase the search costs and the cognitive costs’’ for consumers.
One FTC commissioner, though, opposed the proposal. Christine Wilson said it “relies on flawed assumptions and vague definitions; ignores impacts on competition; and diverts scarce agency resources from important law-enforcement efforts.”
The White House said in a statement: “There is nothing wrong with a firm charging reasonable add-on fees for additional products or services. In the interests of customization, firms should be free to charge more to add mushrooms to your pizza or to upgrade you to a hotel room with an ocean view.
“However, in recent years we’ve seen a proliferation of “junk fees” – a category of fees that serve a different purpose.
“By hiding the full price, this practice can lead consumers to pay more than they would otherwise, and it also makes it hard for consumers to comparison shop.”
Resorts Aim To Justify Added Fees
Caesar’s Palace in Las Vegas justifies the resort fee by saying it pays for local telephone calls, access to the fitness center, and “high-speed WiFi for two devices per room per day.”
Virgin Hotels Las Vegas, which charges $51 per night, says the resort fee covers 20 percent off spa services, two-for-one drinks, long-distance calling, and “two free bottles of water.”
In contrast, other properties such as Marriott’s Grand Chateau on Las Vegas Boulevard include all taxes and charges. The hotel offers “complimentary wireless internet in all guestrooms, villas, and public areas” plus “free access to the fitness center.”