The junk fee issue isn't new – but the fight against them is getting more intense.
The U.S. government has increasingly taken aim at junk fees, charges levied by travel service providers that are considered unnecessary or excessive and not clearly communicated to travelers.
Skift has covered the issue for years. Examples of junk fees in the travel industry include airline-seat selection fees, resort fees or excessive cleaning fees in a short-term rental. Now the Biden administration has been looking to crack down on the practice. Here’s a timeline of events in the fight against junk fees.
July 2019: D.C. Sues Marriott Over Resort Fees
The District of Columbia filed a lawsuit against Marriott International, alleging that the company had made hundreds of millions of dollars through what it had termed as “deceptive charges.” The complaint also alleged that Marriott violated the District’s Consumer Protection Procedures Act by using what the U.S. Federal Trade Commission has labeled “drip pricing.”
The lawsuit said Marriott owned, managed or franchised at least 189 properties worldwide that charged customers resort fees ranging from $9 to $95 daily.
October 2019: Legislation Introduced That Would Change How Hotels Display Fees
Democratic Congresswoman Eddie Bernice Johnson of Texas and Republican Jeff Fortenberry of Nebraska introduced the Hotel Advertising Transparency Act of 2019, a measure that would ban hotels and short-term rentals from advertising rates that don’t include all fees, except for government-imposed taxes and fees.
Executive Editor Dennis Schaal reported there would be penalties for any individual that advertised rooms without including resort fees, adding that the measure — if were passed by Congress and signed by the president — would upend how hotel websites and online travel agencies display hotel rates and fees.
October 2021: D.C. Attorney General Alleges Marriott Made Millions Through “Deceptive” Fees
Two years after suing Marriott, D.C. Attorney General Karl Racine said in newly unsealed documents that the hotel giants hundreds of millions of dollars from resort fees?
How much? At least $206 million solely from its self-managed resorts, according to depositions from the lawsuit, including $17 million from the practice in 2019.
September 2022: U.S. Proposes Mandating Airlines Disclose All Fees When Airfares First Displayed
The Department of Transportation unveiled a proposal that would require airlines to disclose fees for baggage, ticket changes and family seating the first time an airfare is displayed.
“Airline passengers deserve to know the full, true cost of their flights before they buy a ticket,” said U.S. Transportation Secretary Pete Buttigieg, with the department noting that consumers often receive information about additional fees at the time their ticket purchase is confirmed.
October 2022: President Biden Vows to Crack Down on Resort Fees
President Joe Biden said his administration would target “surprise fees” that consumers face, citing in particular resort fees and administrative fees for events such as concerts.
“These are junk fees,” Biden said. “They benefit big corporations. Not consumers. Not working families. And that changes now.”
February 2023: President Biden Accelerates Campaign Against Junk Fees
President Biden blasted junk fees again. Skift reported that the president’s competition committee was calling for certain flight, hotel and ticket charges to be banned. The White House also urged Congress to pass a ban on airline fees for family members to sit with young children.
May 2023: Marriott Includes Resort Fees in Total Prices As Part of Settlement
Marriott International said it would disclose resort fees in the total prices displayed in its initial search results on its website and mobile app, becoming the first major global hotel group to do so. The move was the result of a 2021 settlement with Pennsylvania that required Marriott to include resort fees in upfront total prices.
August 2023: Booking Holidays and Sonesta Sued Over Fee Displays
The State of Texas filed a lawsuit against Booking Holdings, alleging the company violated state law by marketing hotel rates deceptively by not including a variety of fees when it initially displays room prices.
The lawsuit accused Booking Holdings and its sub-brands — including Booking.com, Kayak, Priceline and Agoda — of illegally excluding resort, destination and amenity fees from the initial hotel rates they displayed. The state alleged Booking Holdings also deceptive bundled “taxes and fees” with no transparency later in the booking process.
Texas Attorney General Ken Paxton said the state had also sued Hilton and Hyatt for allegedly displaying their fees in a deceptive manner.
Sonesta, which runs more than 1,200 hotels under various brand flags, was hit by a class-action suit in Washington, D.C. over how it displays resort fees on its website and app. The suit alleged that Sonesta had made “tens of millions of dollars each year” by not disclosing upfront its mandatory resort fees and destination fees, which was exceed $40 a day, at some of its properties
September 2023: California Takes Steps to Crack Down on Junk Fees
California legislators passed two bills that could impact how the state’s hotels and thousands of short-term rentals inform consumers about junk fees, such as resort fees and housekeeping fees. Senate Bill 537 would prohibit businesses selling lodging for up to 30 days in the state from displaying a room rate that doesn’t include all fees or charges (except government-imposed taxes) as of July 1, 2024.
Meanwhile, Senate Bill 478 would bar California businesses from advertising prices that don’t include all mandatory fees or charges, with some exceptions, starting on the same date.
Skift reported that Governor Gavin Newsom had yet to take a position on those two bills.
October 2023: California Bans Junk Fees
California Governor Gavin Newsom signed into law both of the aforementioned bills tackling junk fees. While it’s uncertain how those laws how will impact businesses when they go into effect, Skift reported that if a company doesn’t comply, a consumer could seek “at least $1,000” in damages via the state’s existing consumer protection claims processes.
The laws will go into effect on July 1, 2024.
As for Washington’s ongoing efforts to combat junk fees, the Federal Trade Commission unveiled a proposed rule that would bar businesses — including hotel and lodging companies, short-term rental providers, and car rentals — from charging misleading fees. Businesses would also be required to display the full price of their purchase up front to consumers as well as whether fees are refundable.
Companies that don’t comply with the agency’s regulations could be fined and possibly have to provide refunds to consumers, under the FTC’s proposal.
November 2023: U.S. Senate Panel Investigates Airline Fees
A U.S. Senate panel announced it was investigating airline fees for baggage, seat selection, ticket changes, seeking justification from the CEOs of five major carriers that generate billions of dollars in annual revenue from those charges.
“U.S. airlines increasingly charge ancillary fees that obscure the actual cost of air travel,” Senator Richard Blumenthal, chair of the Permanent Subcommittee on Investigations, said in letters he wrote to the chief executives of American Airlines, United Airlines, Delta Air Lines, Spirit Airlines and Frontier Airlines.
Blumenthal said those fees are often hidden from and confusing to the general public.
What Comes Next
The FTC is soliciting comments from the public about junk fees over a 90-day period that ends on February 7, 2024, after which the agency will determine any changes to the proposal. The Department of Transportation expects to issue its final rule on “Enhancing Transparency of Airline Ancillary Service Fees” in March.
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