No more “unwanted” fees? Biden seeks to crack down on hidden travel expenses.
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Travelers can often run into unexpected charges, such as resort fees for services and amenities such as Wi-Fi access or even paying to print an airline boarding pass at home.
These “unfair” travel costs may soon be abolished.
As inflation continues to hurt Americans’ wallets, President Joe Biden announced this week that he plans to crack down on junk fees, saying they “hit marginalized Americans the hardest.”
Hidden fees have been controversial for several years as politicians have tried to pass bills requiring hotels to share the full pre-tax price of a hotel or short-term rental. Last November, Marriott International became the first major hotel company to pledge to include all resort fees in the total price after being sued in 2019 by the attorney general for the District of Columbia.
These fees are significant in the travel industry and they are only increasing. According to a report by the NYU School of Professional Studies, in 2017 the accommodation industry benefited about $2.7 billion from these surcharges. Profits plummeted during the COVID-19 pandemic when far fewer people traveled, but the charges have recently returned – and with a vengeance. This year, the mandatory hotel fee would have increased each month.
The average resort fee in September was $25.57 per night.
Why do hotels have hidden fees?
An undesirable tax is “when you think you are paying a price to book a hotel, you only find out after checking that there is a ‘resort fee’ you’ve never heard of being added to your bill,” Biden said. A $30 resort fee can make a $170 hotel room cost $400 instead of $340 for two nights.
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These fees often cover services and amenities provided by the hotel or resort, such as Wi-Fi, pool service, housekeeping, or free coffee. In some cases, hotel fees contribute to perks like board game rentals and GoPro camera rentals that may be justifiable for some travelers.
To clarify, an “unwanted charge” does not pay extra to upgrade a room; these are “fees designed either to confuse or mislead consumers or to take advantage of foreclosure or other forms of situational market power,” according to a White House briefing.
What does this mean for travellers?
The White House briefing said the Federal Trade Commission will initiate a ‘rule-making process’ to ‘widely reduce’ undesirable fee practices in markets, such as the accommodation and airline industry. .
For the former, hotel resort fees are considered “low or no value added mandatory fees” that consumers “never consented to” at the time of purchase. Hotels and their booking sites should probably disclose all costs to consumers.
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For the latter, the Department of Transportation will ensure that airlines and online travel agencies like Expedia disclose all fees in advance, such as those for cancellation, changes and baggage.
Some believe that eliminating resort fees will only increase room rates. Others believe that resort fees bring value to travelers and that most hotels are already transparent about these fees.
A spokesperson for the American Hotel and Lodging Association told USA TODAY that “the organization’s most recent data shows that 93% of hotels do not charge resort fees. And when resort fees are applied , they are clearly and prominently displayed on hotel websites prior to the completion of the reservation process, in accordance with guidelines issued by the United States Federal Trade Commission.”