Getting socked with an unexpected fee while checking into a hotel is annoying. Even President Joe Biden weighed in on such fees last year. But that doesn’t mean the deceptive practice has ended. Colorado Attorney General Phil Weiser is closing in on stragglers, announcing his third settlement with a national hotel chain since September.
The latest was with Marriott International Inc., which operates 169 hotels in Colorado. In the settlement announced Wednesday the hotel chain agreed to stop advertising room rates that don’t mention mandatory resort fees. Well, they sort of agreed. Marriott denied the practice is still occurring, according to the settlement. There was no fine levied by the AG’s office.
In an emailed statement, Marriott officials said the company changed its misleading rate displays in the first half of last year and it’s “committed to providing customers with clear and transparent pricing. We have long been focused on ensuring that any resort/destination fees charged by hotels are separately and clearly stated.”
Marriott’s move last spring coincided with other hotels shedding the cloak on hidden fees, especially after Biden called them out for resort fees of up to $90 a night. “Americans are tired of being played for suckers,” Biden said in last year’s State of the Union address.
The tactic violates Colorado’s Consumer Protection Act, and Weiser said he’s been trying to eliminate these hidden fees for years, even writing an editorial in a local newspaper in 2020. While he didn’t mention Marriott by name, “When I wrote it, I had Marriott in mind,” he said.
The attorney general’s office, which has received more than 50 hotel-related complaints about problematic practices, completed similar agreements with Choice Hotels in September and Omni Hotels in November. The trio include many familiar brands, including Radisson, Comfort Suites and Econo Lodge. Weiser won’t say if other hotels are under investigation but added that he’s aware some may still be engaging in the practice. He hopes consumers tell his office by filing a complaint at StopFraudColorado.gov. He just wants hotels to advertise the full price of a night’s stay while consumers are booking a room.
“I’ve had this happen to me personally,” Weiser said. “You say, ‘Wait a minute, why am I paying a resort fee?’ And they say, ‘Well, it’s for the right to use the facilities, the exercise room or the like.’ And you might say, ‘But I’m not going to use them.’ And they’re like, ‘You’ve got to pay it anyway.’ … Most consumers go ahead and pay it. What we need consumers to know is that it’s not OK. This decree prevents Marriott from ever doing that and if you see any other company doing that, we need to hear about it.”
If it happens at a Marriott, Omni or Choice hotel in Colorado, the AG’s office could take the business to court for violating the legal agreements. Should his office hear about other hotels operating similarly, Weiser said they would start an investigation.
This doesn’t mean resort fees are outlawed
The resort fees may no longer be hidden but they’re still there.
Over at the Marriott-owned Gaylord Rockies Resort & Convention Center in Aurora, there’s a $28 resort fee, which covers wireless internet service, shuttle service to the commuter rail stop, use of hotel bicycles and two bottles of water. Parking costs extra.
ResortFeeChecker.com, which tracks fees at 2,000 hotels nationwide, found at least 21 hotels with resort fees in Denver, two in Colorado Springs and another eight in Aspen including a few that charge 8% of the room’s rate.
Resort fees don’t seem to be going away anytime soon, said Soo Kang, a professor at Colorado State University’s hospitality management department.
“They started in the 1990s at resorts because resorts have a lot of amenities and facilities to support,” Kang said. “But now we’ve spread it to nonresort hotels, which is kind of funny to hear because hotels are not resorts. It’s a really widespread practice in North America. If you go to Europe, in a lot of EU countries, you can’t do that. It’s illegal to hide a fee.”
Besides the obvious reason to hide fees to look more competitive to potential customers, Kang said hotels prefer resort fees because they’re taxed at a lower rate than hotel rooms. Another reason is third-party travel sites, which book rooms on behalf of hotels that, in turn, pay a commission. Exclude the resort fees, which a customer pays at the hotel, and the hotel keeps more money. With the industry average resort fee between $35 to $45, that adds up, Kang said.
“Many of the hotels intentionally or unintentionally hide it but making it available up front should be very important from a hotel’s perspective, otherwise people feel deceived. A customer has a lot of power to make a decision based on the information,” she said. “From my perspective, you can charge a fee. That’s fine, as long as consumers see the value in it. The problem is that a lot of fees are for something the customer does not even use, such as unlimited long distance calls. Nowadays, everybody has a cell phone so why? That’s why customers don’t feel like they’re justified.”
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In October, the Federal Trade Commission proposed a new rule to ban junk fees, calling them“hidden and bogus fees that can harm consumers and undercut honest businesses.” Those could include resort fees as well as unclear fees that consumers don’t really know what they’re for. The proposal goes beyond hotel resort fees, but also concert ticket fees, extra charges on grocery-delivery apps, transportation fees and so on. More than 60,000 public comments have been submitted as of Wednesday, when the comment period closed.
While the FTC estimated that the hidden charges cost consumers “tens of billions of dollars” a year, there are fewer specifics on how much hotels collect each year in resort fees. In a 2016 report on hidden fees, the National Economic Council cited data from consumer watchdog group Travelers United that estimated “resort fees accounted for $2.04 billion — or 16.6% of revenue for the hotel industry.” By 2018, the figure was forecast to grow to $2.93 billion, or another 44%, according to lodging industry researcher Bjorn Hanson.
“If someone discloses the resort fee on top of the reservation fee and when you book it you know what the all-in price is, that’s up to them, as long as people know what they’re paying for,” Weiser said. “What’s particularly problematic for us with this practice is that people don’t know they have to pay this (fee). They’ll make their decisions and they’ll be told literally when they show up at the hotel. And by then, they’ve lost their ability to negotiate. This is really a predatory practice, preying on consumers who were deprived of their ability to make an informed decision.”