CR Investigation Finds Deceptive Pricing Practices Remain Widespread Years After The FTC Warned Hotels And Online Travel Agencies to Disclose All Fees In Quoted Prices
WASHINGTON, D.C. — Consumer Reports today urged the Federal Trade Commission to take tougher action to stop hotels from charging resort fees that aren’t disclosed in the price they advertise for hotel rooms. Seven years ago, the FTC issued warnings to numerous hotels and online travel agencies to refrain from the unfair practice, but an examination by CR found that the vast majority of them continue to use deceptive pricing in their advertisements.
In a letter delivered to the FTC today, Consumer Reports called on the Commission to investigate and initiate enforcement action against hotels that charge mandatory resort fees that are not included in the base, advertised rate of the hotel room. The consumer group urged the FTC to issue a clear statement that advertisements for hotel rooms, including those made by third-party operators, that do not include mandatory fees in the quoted price, are deceptive and violate the FTC Act prohibition against unfair or deceptive acts or practices.
“The FTC took some initial steps to combat this misleading practice years ago, but has been largely silent since then,” said Anna Laitin, director of financial policy for Consumer Reports. “The Commission’s failure to take tougher enforcement action has allowed hidden resort fees to remain rampant in the marketplace.”
In 2012 and 2013, the Commission sent letters to 34 hotels and 11 online travel agencies warning them that they may be violating the law by not adequately disclosing resort fees. The letters detailed the problems with including only the room rate and applicable taxes in the “estimated price” and adding resort fees later on. At times, the Commission found that the resort fee was noted off to the side, hidden by a hyperlink, buried in fine print, or even that the hotel failed to identify resort fees anywhere.
An investigation by Consumer Reports this summer found that 31 of the 34 hotels previously targeted by the FTC continue to charge resort fees and none of those include the fees in the price quoted to consumers. Similarly, none of the 10 online travel agencies that are still operating today includes the resort fees in the initial quoted price.
“Travelers shouldn’t get surprised by unexpected and costly fees when they check into their hotel or settle their bill at the end of their stay,” said Laitin. “Hotels should be required to disclose the full cost in the quoted price so consumers can comparison shop and find the best deals when booking a room.”
A nationally representative survey of over 2,000 US adults conducted by Consumer Reports in 2018 demonstrates the confusion and frustration caused by these fees. In that survey, 34 percent of people who have received a hotel bill in the past two years said they encountered a hidden or surprise fee on that bill, and more than half said that those hotel fees had caused them to go over budget.
Consumer Reports’ effort comes at a time when major hotels have been the subject of lawsuits challenging hidden resort fees. In early July, the DC Attorney General sued Marriott for charging deceptive and misleading resort fees that hide the true cost of booking a room at the hotel chain. Just two weeks later, the Nebraska Attorney General filed a similar lawsuit against Hilton.
Consumer Reports recently launched its “What the Fee?!” campaign, an organization-wide effort to highlight surprising fees and charges across industries – and help consumers fight back. Consumers can visit WhatTheFee.com to share their stories and learn how to avoid hidden fees.
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Contact: David Butler, dbutler@consumer.org, 202-462-6262
Consumer Reports is an independent, nonprofit membership organization that works side by side with consumers to create a fairer, safer, and healthier world. For 80 years, CR has provided evidence-based product testing and ratings, rigorous research, hard-hitting investigative journalism, public education, and steadfast policy action on behalf of consumers’ interests. Unconstrained by advertising or other commercial influences, CR has exposed landmark public health and safety issues and strives to be a catalyst for pro-consumer changes in the marketplace. From championing responsible auto safety standards, to winning food and water protections, to enhancing healthcare quality, to fighting back against predatory lenders in the financial markets, Consumer Reports has always been on the front lines, raising the voices of consumers.