Are hotel resort fees on their way out the door?

racorn/Shutterstock
racorn/Shutterstock
Even though the Doubletree San Juan isn’t really a resort, it still charged Cheryl Nygaard an 18% per night resort fee on her recent visit to Puerto Rico.

Worse, the $15-a-night “service” charge, which covered her Internet connection, beach chairs and towels, an in-room DVD player, and water and pool amenities, was added to her bill at the end of her stay.

“I didn’t know about the fees until I checked out,” she says. Nygaard, a corporate trainer from Dallas, who had booked the room through her travel agent, asked if the charge could be waived. She was in San Juan on business and didn’t use the pool, beach chairs or DVD player.

“I was told ‘no,'” she says.

No wonder. U.S. hotels collected an estimated $2.1 billion in resort fees in 2013, about double the amount from a decade ago. Customers hate these travel surcharges. They wish companies would just quote an honest rate that includes all required fees.

Hilton apologized for Nygaard’s confusion, saying the company makes every effort to ensure that all mandatory fees for hotels in its system are disclosed.

But the truth is, the travel industry doesn’t care for these bait-and-switch practices, either.

Although individual hotels mount a spirited defense — last year, for example, Caesars slapped its guests with a resort fee, brazenly claiming they had asked for it — the rest of the industry is plotting to kill resort fees.

That may seem counterintuitive, but if you follow the money, it makes perfect sense. Neither travel agents nor hotel companies benefit from resort fees in a meaningful way.

Instead, most of the $2.1 billion flows directly to hotel owners, while the intermediaries and management companies are bypassed, then blamed — often falsely — for the charges.

It’s a classic win-lose.

Plus, a little more than a year ago, the Federal Trade Commission (FTC) sent warning letters to hotels and online travel agencies, saying resort fees “might” be deceptive, a move that was seen as a first step toward a stronger enforcement action.

Resort fees could die quickly at the hands of the FTC. A single consent decree, which concludes resort fees are unfair and deceptive, would give large hotel companies the excuse to permanently end the practice, even over the objections of owners. The FTC would not comment on future actions, but in a recent interview, Jessica Rich, director of the its Bureau of Consumer Protection, told me the agency would continue to work with the industry “to improve upfront disclosures” about such fees.

Guests want more than disclosure, though. They want resort fees to check out permanently.

“The fees are ridiculous,” says Nygaard. “They’re a cash grab. The cost of the room should include using the hotel amenities.”

As guests such as Nygaard see it, they’re entitled to an upfront price for their room — the same “all-in” rate airlines now must show.

At the time of Nygaard’s complaint, booking a room at the Doubletree in San Juan through Hilton.com meant waiting until the second booking screen to find out about its fees.

But the exact amount wasn’t revealed until you clicked on a “details” link, which appeared as a pop-up on the third reservations page. Until then, guests might have believed they were getting a lower rate.

“It’s totally wrong,” says Molly Forman, who works for a technology company in Dallas and recently booked a room at the Hilton Hawaiian Village Waikiki Beach Resort. She didn’t know about that property’s resort fee until after she arrived, although in fairness, this Hilton is a real resort and its $30-a-day fee is more clearly disclosed online.

“If I had been aware of the rate earlier, or that it was not optional, I could have chosen a different property,” says Forman.

As a matter of policy, Hilton discloses its fees on the first page of its website. All required surcharges are included in the total price quoted at the time of booking and in the e-mail confirmation, the company says.

“We will follow up with the Doubletree in San Juan to ensure that their disclosures are consistent with our standards,” says Hilton spokeswoman Dasha Ross.

The demise of resort fees could be the first of several fee-dominoes to fall, leading to the eventual collapse of other deceptive surcharges in the travel industry.

Imagine booking an airline ticket that includes a confirmed seat, a boarding pass and the ability to check a bag, as all airline tickets should? Or a rental car that includes, well, everything?

Will the FTC — or a court or Congress — finally say what travelers have been thinking for more than a decade? Will it declare that mandatory surcharges that aren’t revealed until the end of your stay are deceptive?

What a win-win.

Should hotels be allowed to charge mandatory resort fees?

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