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Skift Take

While the Truth in Hotel Advertising Act has yet to gain any support in Congress, it represents a blow to ubiquity of hotel resort fees and other surcharges that are traditionally tacked on at the end of a hotel stay.

— Andrew Sheivachman

The hatred of hidden resort or service fees tacked onto hotel rates is well-documented.

Senator Claire McCaskell (D-Mo.) has now introduced a bill to the U.S. Senate that would require hotels and online booking sites to disclose during the booking process any fees that are typically charged at the end of a stay.

The Truth in Hotel Advertising Act of 2016 would give the Federal Trade Commission (FTC) the ability to enforce penalties on companies that advertise hotel rates without including additional mandatory fees.

“It’s clear there’s a bait-and-switch going on when it comes to these hidden hotel fees, and consumers are paying the price,” said McCaskill, the former chairman of the consumer protection subcommittee. “What I heard from Missourians was clear—families who’ve saved for a well-deserved vacation are too often facing sticker shock when they’re slapped with their final bill. This legislation provides a common sense solution, requiring hotels to be upfront about mandatory costs by including them in room rates.”

The bill has yet to earn any co-signers, but has been assigned to the Senate Committee on Commerce, Science and Transportation for consideration.

The FTC issued issued a warning to the hotel industry in 2012 about including compulsory fees in advertised rates, but barely any hotel companies have changed their practices.

The hotel industry should be concerned about the prospect of accountability for the multiple services that travelers are charged for when they check out, but most never use. The bill essentially makes it a crime on the state level for hotels to not include all fees, besides taxes and other government surcharges, in advertised rates.

Unsurprisingly, the hotel industry isn’t happy about the bill since it will make hotel rates appear more expensive to consumers. Hotel industry advocates believe the legislation would make it easier for intermediaries like online booking sites to hide their own fees.

“Whether booking direct or through a third-party, consumers and local governments deserve full transparency with their hotel reservations – something this proposed legislation would severely hamper,” said Katherine Lugar, head of the American Hotel & Lodging Association. “By creating a broad new federal mandate that empowers online travel agencies to hide their service fees, this bill would promote confusion among consumers and local governments. Throughout the booking process, hotels are transparent about costs, fees and taxes and how they are distributed and has actively followed guidance provided by the FTC.”

The sticking point for the AHLA seems to be that the bill calls for penalizing hotel operators, but online booking sites that actually display the rates aren’t given the same scrutiny.

“Unfortunately, instead of providing consumer with clarity and transparency in the online booking process, this legislation would hide millions of online travel agency service fees being charged,” said Lugar. “The so-called Truth in Hotel Advertising Act does not address this deceptive and unfair practice – ignoring consumer’s right to know what they are paying for and that’s why we are asking legislators to oppose this bill.”

Tags: fees, ftc

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