What The FTC Report On Hotel Resort Fees Means to Travel Agents

by Paul Ruden

In early 2017 the Federal Trade Commission’s Bureau of Economics issued a report entitled Economic Analysis of Hotel Resort Fees. While this is a staff paper and not a Commission edict, it is indicative of the position of the FTC enforcement staff regarding the proper method of disclosing hotel resort fees by hotels. It does not deal explicitly with the proper way for travel agents to disclose the fees—but it will likely be considered as indirectly authoritative on that question as well if the issue of travel agency non-disclosure should arise in litigation.

For travel agents, the best strategy is not to wait for clarity from litigation that may be years away, if it ever happens at all. Nor is it wise to await FTC formal action on resort-fee disclosure, which may also be a long way off and will not likely address travel-agency disclosures in any event. 

Travel agents should instead accept that disclosure of resort fees belongs right up there with disclosure of code-sharing, and that the best policy is pro-active.

The FTC report makes clear, in the formal language of economics, that the current practice of disclosing resort fees late in the booking process harms consumers. It considered the hotels’ arguments in support of the fees and concluded they “do not withstand scrutiny” (FTC Report at 35). For travel agents, then, it is a good practice to assume that consumers will often feel misled if they are talked through a hotel booking and somewhere near the final commitment point are told about the resort fees. There are many anecdotal reports to this effect and it is the position of a prominent consumer advocacy group, Travelers United. Even the National Economic Council has recently reported on the misleading nature of mandatory resort fees, calling such fees “a prime example of a hidden fee.”

Note that this problem is not just about the resort fee itself, but also involves any services covered by it. Non-covered services will be charged for separately, often to the great annoyance of the unsuspecting traveler. As a professional, it is, I believe, the responsibility of the travel agent to be sure his client is fully informed about both the existence and coverage of any mandatory resort fees.

Best practices
Here, in my view, is the best practice for travel agents regarding mandatory resort fees. When a client and travel agent begin discussing hotel options and price is first mentioned, it is incumbent upon the agent to immediately check to see if there are resort fees at the property in question, and to inform the consumer that the “published price” does not include the fee and the specific services that are covered by the fee. Provide the client with the total price, including the fees, as early in the conversation as possible. In no case should you let the conversation progress to other subjects with the client believing that the published price is the real price. Make a note to record the fact of these disclosures. 

If you do not already know the property’s policies, check its website and take a screenshot of the relevant information. If there is any ambiguity about whether the fees are mandatory and what is included in them, call the property and make a note in the client’s record of whom you spoke with and what they told you. It’s also a good idea to be sure your staff is trained in how to explain resort fees to clients. 

By following this straightforward protocol, you should never be subject to complaints that you misled someone about the price of the hotel room you sold them.  

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