Over the past couple of years, President Joe Biden has called on the Federal Trade Commission (FTC) and other agencies to end “junk fees,” which are hidden or misleading fees tacked on to things like loans.
The President spoke against junk fees during his State of the Union (SOTU) speech earlier this month, making a point to highlight resort fees. The American Gaming Association (AGA) was not happy. AGA CEO Bill Miller submitted comments to the FTC pushing back on the call to end resort fees.
“Resort fees at our members’ properties are charged for services that provide substantial value to customers, enhance the quality of their stay, and distinguish resorts from standard lodging offerings.”
Resort fees generate billions for the hotel industry
During Biden’s SOTU speech, he said that resort fees can add a considerable amount to a customer’s bill.
“We’ll ban surprise ‘resort fees’ that hotels tack on to your bill,” Biden said. “These fees can cost you up to $90 a night at hotels that aren’t even resorts.”
The FTC noted that resort fees accounted for one-sixth of total hotel revenue in 2015. A comment submitted to the FTC by Consumer Report noted that the hotel industry earned $2.9 billion from resort fees in 2018.
AGA argues resort fees aren’t the same as junk fees
Junk fees tend to be misleading or hidden. However, Miller argued that hotels prominently display resort fees during the purchase process.
Consumers know exactly how much their resort fees are as they move through the booking process, Miller said. Additionally, Miller pointed out that resort fees don’t meet the FTC’s standard for junk fees, which is a fee that provides “little or no added value to the customer.”
He then noted that resorts use fees to “pay for a range of different amenities” that include, in many cases:
- Local phone calls
- In-room internet
- Resort-wide internet
- Parking
- Electric vehicle charging stations
- Fitness centers
- Shuttles
- Pools and hot tubs
- In-room entertainment
“Resort fees are a signal to our customers that they will get more than just a well-appointed room,” he said. “Because these extra amenities and services come at a cost to the resort, patrons are charged a resort fee–they are inherently valuable and therefore should not be considered ‘junk.'”
Miller also argued that eliminating resort fees will create an uneven playing field. A resort with numerous amenities would have to roll a resort fee into the room rate. The casual traveler may see that higher rate, wonder why it’s so expensive, then choose a hotel with a lower rate–and fewer amenities they may want or need.
Consumer groups want resort fees banned
While the resort industry cries foul over Biden’s push to end resort fees, consumer advocates like Consumer Reports are defending the bill.
Consumer Reports noted that the number of properties charging resort fees has gone up. For example, in New York, the number of hotels charging resort fees jumped from 15 in 2016 to 85 in 2018.
The company noted that two Las Vegas properties, Wynn Las Vegas and Encore Hotel, only revealed their resort fees on the final checkout page. This type of practice can come off as a bait-and-switch.
In a 2019 letter to the FTC, Consumer Reports detailed a study of 34 hotels that used bait-and-switch tactics. In some cases, added fees double the price of the advertised room rate.
“Customers have to make multiple clicks to arrive at a checkout page to see the total costs, including fees. Among the hotels surveyed, those add-on expenses, including resort fees and other surcharges, as well as taxes, ballooned the total costs by 11 percent to more than 100 percent.”
