Sen. McCaskill introduces bill against hidden resort fees
Sen. Claire McCaskill is taking on so-called hidden resort fees.
The Democrat from Missouri today introduced a bill that would prohibit hotels from charging hidden resort fees. The legislation would require hotels to disclose and include the full cost of a traveler’s stay in their room rate.
“I don’t think it’s any of the government’s business what they charge for the rooms,” McCaskill told USA TODAY. “But I want the consumers to know how much they are getting charged for their rooms.”
This past summer, the former Chairman of the Consumer Protection Subcommittee asked consumers in her state to share their stories about being charged resort fees that caught them by surprise. McCaskill says she got hundreds of responses on her website.
Hotels charge the non-optional resort fees for such amenities and services as a swimming pool, gym, coffee, or newspapers. They usually range from $5 to $100 a night.
“It’s this trend of nickel and diming consumers to death,” McCaskill says, likening the fees to those charged by airlines for carry-on bags or seat assignments.
New poll: Travelers want hotels to disclose resort fees
Her proposed legislation would explicitly prohibit advertising a hotel room that does not include all required fees. It would give the Federal Trade Commission the authority to enforce the prohibition. It would also give state attorneys general authority to enforce the prohibition by bringing a civil action in federal court.
McCaskill wrote to FTC Chairwoman Edith Ramirez last summer encouraging the agency to use its existing authority to prevent unfair and deceptive advertising to stop the hidden resort fee practice.
The FTC in 2012 acknowledged that many hotels and resorts were not mentioning the fees at all or if they did, they used fine print or vague language.
That year, the FTC sent warning letters to 22 hotel operators that were misrepresenting the price consumers would actually be paying for hotel rooms. But the FTC has stopped short of taking legal action.
“I’m frustrated they are not using their broad powers,” McCaskill says.
The American Hotel and Lodging Association, which represents the hotel industry, has said that hotels are always upfront about charging resort fees.
"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," says Katherine Lugar, President and CEO of AH&LA.
Lugar says the bill would make it easier for online travel agencies such as Expedia to hide their own service 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," she says. "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."
The Association also says that mandatory resort fees are declining and have been historically low since 2004. According to an AHLA survey, only 7% of 53,000 hotels charged resort fees in 2014.