FTC Warns Hotel Chains to Stop Hidden 'Resort Fees,' 'Drip Pricing'

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Resort hotelFrequent travelers know that surprise fees have become the norm. Want a meal on that six-hour cross-country flight? That'll cost extra. Packing a bag for holiday gifts? You'll pay for the privilege.

But unlike airline websites, where it's pretty easy to find out about the fees not included in the flight price, resorts and hotels aren't always so forthcoming.

"Drip pricing," as it's called in the industry, is a common practice among operators of resorts. These extra charges for everything from a fee for a newspaper to towel rentals at a cabana to daily Internet access are often tacked onto the guest's bill without the consumer's knowledge or consent.

According to the Federal Trade Commission's Bureau of Consumer Protection, these charges can run as high as $30 a day.

A Shot Across the Bow

The FTC is now saying that these practices may be breaking the law by "providing a deceptively low estimate of what consumers can expect to pay for their hotel rooms." It's issued a warning letter to 22 hotel operators after complaints lodged against resorts and hotels by customers attending an FTC conference on drip pricing.

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The warning letter cites customers who had made reservations far in advance, and only learned of the added charges after arriving at the hotel. Some customers even paid for the accommodations when making the reservation, and were hit with extra fees upon checkout.

A study by the FTC showed that some online reservation websites listed the resort fee separately from the total cost of the room, some listed it after a series of links that led to other pages, and several didn't list the resort fees at all.

Buyer Be Very, Very Wary

Whether the warning letter will cause resorts to change their practices remains to be seen. But you can avoid unpleasant surprises with a few precautionary steps:
  • Always call to confirm a reservation's total price and ask specifically about any resort fees.
  • Re-confirm upon check-in the total price per night.
  • If there are any surprises, ask to speak with a manager, or call the corporate customer service office.
As many hotels belonging to large chains are franchised, fees may vary by location. To skip surprises altogether, look beyond hotels entirely for a more unique experience.




Molly McCluskey is a Motley Fool contributing writer. Follow her on Twitter @MollyEMcCluskey.
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