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Federal Trade Commission warns hotels


Hotel operators warned about unquoted 'resort fees'

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Hotel operators warned about unquoted 'resort fees'
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Dec 02, 2012

If you've ever been hit with one, you know how an unexpected "resort fee" can take your breath away. At up to $30 a night, the dollars quickly add up when you spend a few nights in a hotel that charges a mandatory fee for amenities that might include the use of the property's gym or pool.

The element of surprise that accompanies some of these mandatory fees has caught the attention of the Federal Trade Commission, which recently sent a letter to 22 hotel operators warning that their online rate quotes may be deceptive and in violation of FTC regulations.

The commission found that some of the hotel operators it addressed list only the room rate and taxes in online rate quotes, while listing mandatory fees separately either nearby or on another page, while other hotels list the fees in fine print or don't list additional fees at all, indicating only that other fees may apply.

"These practices may violate the law by misrepresenting the price consumers can expect to pay for their hotel rooms," the commission's letter to hoteliers said. "We believe that online hotel reservation sites should include in the quoted total price any unavoidable or mandatory fees, such as resort fees, that consumers will be charged to stay at the hotel."

The FTC declined to name the hotel operators that received the letter.

"This is the first time the FTC has publicly stated its position that it is deceptive for the hotels not to include mandatory fees as part of the total price they quote. We want to give the hotel operators an opportunity to come into compliance voluntarily before naming them publicly," said commission spokeswoman Betsy Lordan via e-mail.

Charging mandatory fees for amenities that are included at many hotels is a balancing act for hoteliers, according to Howard Adler, a professor of hotel management at Purdue University. Hotels make money on resort fees, but they can lead to customer dissatisfaction and loss of business, he said via e-mail.

"Guest satisfaction is a very costly issue for hotels to deal with since (consumers) have so many choices and brand loyalty is fleeting at best," Adler said.

Guests who are surprised by fees when the bill arrives can be especially troubled by them.

The trade commission encouraged the hotel operators to review their online price quoting procedures warning that the FTC "may take action to enforce and seek redress for any violations of the FTC Act as the public interest may require."

So guests will still have to pay the fees, but chances are, you'll know about them before the bill is slipped under the door.

Source: CNN




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