'Resort Fees' and Other 'Junk Fees' May Soon Be a Thing of the Past—Here's Why The U.S. government wants to ban hidden travel charges.
Key Takeaways
- Resort fees, along with additional charges imposed by airlines and event ticket sellers, are often not included in the initial price during online bookings.
- The Junk Fee Prevention Act and Hotel Fees Transparency Act is proposed to ensure businesses display the full price upfront, including all fees, and whether or not they are refundable.
Opinions expressed by BIZ Experiences contributors are their own.
Nothing in life is free, and hidden charges in the form of "resort fees" and other added costs are irking many travelers.
Now, new legislation aims to ban the use of "junk fees," citing their impact on consumers' expenses.
These fees include mandatory charges applied by places like hotels (to cover amenities such as gym access and internet), event companies (service fees on concert tickets, for example), and airlines (bag fees, etc.).
Resort fees (and additional fees imposed by airlines and event tickets) are typically not included in the initial price when booking online, making it challenging for consumers to compare prices effectively. A 2017 report from the Federal Trade Commission found that since resort fees are presented separately from room prices, it can make the consumer search for the best price more complicated and "difficult to comparison shop."
Only six percent of hotels charge resort fees, according to the American Hotel & Lodging Association, per The New York Times. Still, those fees can add up — a separate 2018 report from Bjorn Hanson found that resort fees generate $3 billion annually for hotels.
The Biden Administration's Junk Fee Prevention Act and Hotel Fees Transparency Act would require businesses to display the full price upfront, including fees, to prevent the uptick in surprise charges, and face monetary penalties if failing to comply. It would also require businesses to be upfront about whether the fees in question are refundable.
The proposed rule has been approved by the FTC for Federal Register publication and, once posted, consumers can issue comments for 60 days. But not everyone is on board.
Neil Bradley, executive vice president of the U.S. Chamber of Commerce, said in a statement on Wednesday that he believes the legislation would actually hurt consumers.
"Every minute of every day, Americans engage in close to 400,000 transactions, buying and selling goods and services," Bradley said. "It is baffling that the administration believes it is going to help consumers by regulating how businesses price all of those transactions."
