Deeming resort fees “out of control,” the American Society of Travel Advisors (ASTA) has launched an advocacy campaign in support of the Hotel Advertising Transparency Act of 2019, bipartisan legislation introduced in Congress in late September.
The travel advisor organization issued a letter to members on October 9 announcing its support of the bill, which is sponsored by Rep. Eddie Bernice Johnson, a Texas Democrat, and Jeff Fortenberry, a Republican of Nebraska. Travelers United and Consumer Reports likewise back the measure.
The bill seeks to bar hotels and other short-term rentals from tacking on fees, which can include anything from maid service to fitness center access, that aren’t shown up-front in the advertised room rate.
The legislation comes in the wake of several lawsuits introduced earlier this year against hotel chains over resort fee practices.
In the letter, the travel advisor organization stated its long-held support of mandatory pricing disclosure, including the Federal Trade Commission’s ongoing efforts to increase hotel pricing transparency as well as the U.S. Department of Transportation’s full-fare advertising rule.
“We believe the hidden hotel resort fees violate this principle of transparency, and that public sentiment is with us (and with you) on this issue,” the letter stated, alluding to the organization’s annual How America Travels research study, which found in 2017 that 61 percent of consumers opposed the practice of hotels adding resort fees on top of advertised rates.
The letter is only “step one” in the organization’s plans to advocate in support of the legislation, Eben Peck, ASTA’s executive vice president, advocacy, told Skift.
“We felt it was important to go on record in support of this bill to crack down on ‘the most hated fee in travel,’ as Travelers United put it,” he said. “We’ll also be raising the issue in the course of our congressional outreach.”
The bill is likely to be part of the advocacy efforts during ASTA Legislative Day to be held in Washington, D.C., on February 3–4, 2020, he added. The annual program brings travel advisors to Capitol Hill where they can meet with congressional members to discuss travel industry issues.
Noting that ASTA’s Hotel Distribution Advisory Committee has stated that resort fees are “out of control,” Peck said the need for pricing transparency is increasing — and so has public sentiment in favor of it.
“The fees continue to proliferate,” he said. “According to a 2017 FTC [Federal Trade Commission] report, consumers paid about $2 billion in resort fees in 2015, up 35 percent from the previous year. I think the recent lawsuits on the subject have raised public awareness on the subject as well.”
Critical Role of Travel Advisors
Peck also said that feedback from travel advisors is showing support for hotel pricing transparency.
“Our members have complied with the DOT’s [Department of Transportation’s] full-fare advertising rule with regard to airfares for close to a decade and think the same principles should apply to the hotel side — these are mandatory changes, they should be included in the full advertised price,” he said.
Peck also believes travel advisors are playing a “critical” role in protecting clients against hidden hotel charges.
“We are told resort fees are generally “findable” in the GDSs [Global Distribution Systems] and through other means like Resort Fee Checker,” he said.
“Perhaps most of the pain occurs for consumers booking without the guidance of an trusted ASTA-member advisor, but on principle we feel strongly that hotel pricing should be put on a level playing field with the airlines.”
Shawn van der Putten, travel consultant with Exquisite Travel Group and vice president of the ASTA Greater Seattle Area chapter, is among travel advisors who would like to see travelers avoid any pain stemming from hidden resort fees.
“The hotel should explain the fees, so people know what to expect,” she said. “People often save up for a vacation,m and they are on a budget. When they get slapped with an unexpected resort fee, it could mean hundreds of dollars. The client needs to know beforehand.”
Jennifer Wilson-Buttigieg, co-chair of the society’s government and political affairs committee and co-owner of Valerie Wilson Travel in New York, compared hidden hotel fees to “selling a pen without ink” and said they create problems for both the business and leisure travel sectors.
“Hidden hotel fees going unchecked would result in a lack of clarity, resulting in inflated budgets on the corporate side and, on the leisure side, families and individuals being forced to pay more than expected,” she said. “The travel industry can only benefit from supporting this legislation.”
While not coming out for or against the legislation, the American Hotel & Lodging Association defended the way hotel companies handle resort fees and shifted some of the responsibility onto third parties and short-term rental platforms.
“When resort fees are applied, they are clearly and prominently displayed by hotel websites prior to the end of the booking process, in accordance with guidelines issued by the U.S. Federal Trade Commission,” said Brian Crawford, executive vice president of government affairs for the American Hotel & Lodging Association, in a statement. “We believe that online lodging advertisers, including third-party online travel agencies and short-term rental platforms, should be held to the same standards of transparency.”
How much of an impact would resort fee transparency be to the hotel industry? In places such as Las Vegas, where resort fees are particularly prevalent, it could be significant.
“The bill, if successful, will have an impact on the larger-scale Las Vegas Strip operators, namely MGM Resorts International and Caesars Entertainment,” Carlo Santarelli, a gaming analyst for Deutsche Bank, said in a statement to investors.
Santarelli also said online travel agencies represent between 20 percent and 25 percent of the hotel rooms sold for the 18 Strip resorts operated by MGM and Caesars. He estimated the hotel companies could see a cash-flow impact of between $10 million and $15 million annually because the commissions they pay the sites would increase if posted room rates included the fees.
There also could be an impact on cash flow even if hotels keep charging resort fees that aren’t included in room rates because Booking.com vows to charge hotels commissions on such fees.