Mandatory Resort Fees Are a Rip Off

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Prevue reached out to John S. Foster, Esq., an attorney, author, speaker, and consultant about his take on resort fees and the lawsuit between the District of Columbia and Marriott International Hotels. Here is what he had to say.

Mandatory facility fees or mandatory resort fees, whatever you call them, are, in my opinion, a rip off for consumers and meeting attendees.

The recent lawsuit filed by the District of Columbia claims that Marriott International Hotels, and its many properties, are violating the D.C. Consumer Protection Procedures Act through a practice called “drip pricing” that the Attorney General in D.C. calls “straight-forward price deception.” This practice is wide-spread in the hotel industry and isn’t limited to just Marriott.

Marriott happens to be the big fish that the government wants to make an example of. No doubt there will be legal actions brought in other jurisdictions against other hotel companies depending on the outcome of this case.

The complaint in the lawsuit offered evidence that many Marriott Hotels advertise a fixed price, whether on their website or through online travel agencies and then later reveal to the consumer when he/she gets to the property to check-in or check-out that the consumer must pay additional fees.

It is not possible to compare the price of a hotel room at one hotel with another if all the mandatory fees and taxes are not disclosed upfront.  Hotels defend this practice by asserting that the consumer is always free to walk away from the reservation when the fee is finally disclosed.

Let’s shift to group contracts. My problem with the mandatory fees is the mandatory part. I’ve been battling openly disclosed mandatory service fees or mandatory resort fees in group contracts for years. As asserted by the D.C. Attorney General, the fees range from $9.00 to $95.00 per day.  When asked what the fees include, guests and planners are frequently told by the hotels that they are doing guests a favor by bundling certain services into a plan that can include such items like morning newspaper, free long-distance calls, entry into the health club, and Internet connection.

They assert that the guest saves money by getting all of these services in a package rather than obtaining the services individually. Well, not so fast. What if I don’t want any of the services or only one of the services? Too bad, guests and planners are frequently told that have to pay for all the services whether they are used or not.  Oh really.  My strategy is to change the contract to say that the bundled package is not mandatory, and each guest will be given the option to accept or reject the package when they check-in. This contract strategy is successful a high percentage of the time, but hotels push back because even though they know that the package includes services that many people do not want, and resent having to pay for them on a mandatory basis, the hotel industry makes millions of dollars in revenue on this practice.

For instance, using myself as a typical traveler, I read newspapers on my iPhone every morning, I make all my calls on my cell phone, I don’t use hotel health clubs, and if I want to use the in-house WiFi, I frequently go to the hotel lobby.  In other words, hotels are going to lose money on me if I get to choose what, and if, I want any additional services other than a room and meals.

Even if I decide to use one or two of the services on an a la carte basis, it will still be cheaper than buying the bundled package. If I want all of the services, I’ll take the package, but don’t force me.  I’ll choose a different hotel rather than stay at a property that forces me to pay for something I don’t want or need. Hey hotels, isn’t giving consumers freedom of choice what the free enterprise system is all about? It’s not about forcing people to buy products or services that they don’t want.  (Remember that the mandatory part of Obamacare was struck down by a Federal Judge as unconstitutional).

In addition, I always include a provision in my group contracts that “neither the meeting sponsor nor the attendees will be liable for additional fees not disclosed in the contract without the written consent of the meeting sponsor nor the individual attendee, respectively.”  Further, “the hotel will not make agreeing to a mandatory fee a condition of checking into the hotel.” This prevents miscellaneous fees from being forced onto the group or the attendee without  their consent.

I believe that the D.C. Attorney General will be successful in getting Marriott to change its business practices about being more transparent in stating the full price of a room upfront. Virtually every state has a similar law, so the ripple effect will be nationwide. The case probably won’t go to trial, but the parties will reach a settlement agreement whereby Marriott agrees to stop the current deceptive practice.  Although I don’t expect the fees to go away, I would like to see Marriott and other hotels get rid of the mandatory part of the equation and give consumers a choice as to what they pay for.  This probably won’t happen until Marriott’s competitors start giving consumers a choice that puts pressure on Marriott to change.  I’m not holding my breath, but we will see.

To contact, Foster, go to [email protected]. For more information on this controversial topic, go here and for a website that is helping kill resort fees, click here.

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