Unveiling Deceptive Hotel Fees
Many of us are eager to travel this summer after enduring the restrictions imposed by the pandemic. However, it’s important to exercise caution, as those seemingly affordable plane tickets or hotel rooms advertised online may be deceptive, leading you to spend more than you initially anticipated.
Hotels and airlines, striving to recover from the financial losses incurred during the pandemic, have increasingly resorted to hidden charges, known as “junk fees,” to offset their expenses. Numerous studies and travel experts have highlighted this concerning trend.
Encountering these junk fees during your travels is a common occurrence. These additional charges can take various forms, such as fees for resort amenities, checked luggage, seat selection, and more. Unfortunately, they are often undisclosed when you use an online search engine, only surfacing towards the end of the transaction.
Although the travel industry has long employed the practice of “unbundling,” where services are separated and charged individually, certain fees, such as baggage and seat selection on planes, have escalated during the pandemic. Moreover, vague hotel resort fees, typically ranging from $20 to $50 per day, have become customary, encompassing basic services like Wi-Fi and parking.
Consumer Reports estimates that hotel-related junk fees cost travelers approximately $3 billion annually. In the case of airlines, revenue from ancillary fees, including carry-on luggage, seat assignments, and early boarding, reached $102.8 billion in 2022, marking a 56 percent increase from the previous year, as reported by IdeaWorks, an airline consulting firm.
Consequently, the days of easily using search engines like Google, travel guide articles and Expedia to find travel deals are long gone. While you may obtain a rough estimate of ticket or hotel room costs, it requires substantial additional time and effort to determine the actual expenses involved.
According to Henry Harteveldt, president of Atmosphere Research, a travel analysis firm based in San Francisco, “Hotels and airlines want to make it challenging for consumers to compare the true cost of their flights or hotel stays based solely on price.” This tactic aims to discourage price-focused purchases.
Given the widespread prevalence of junk fees, regulators are calling for change. The Federal Trade Commission (FTC), which initiated an investigation into these fees last year, intends to introduce rules that restrict businesses from imposing them in the near future.
However, until new regulations are implemented, it falls upon us to be vigilant and circumvent deceptive pricing practices whenever possible. Here are some strategies to achieve that:
To identify a hotel junk fee, consider the following scenario:
Let’s say you’re booking a room this month at the Grayson Hotel by Hyatt. The initial search on platforms like Google or Expedia displays a rate of $331 per night. However, as you proceed to the checkout process, the actual price rises to $421.
Upon examining the details, you will discover the additional taxes, which are expected. What comes as a surprise is a vague $34 destination fee, encompassing Wi-Fi access, gym usage, and a 10 percent discount at the hotel restaurant, charged on a daily basis. This fee represents around 8 percent of the room cost.
Over the course of a few days, these seemingly insignificant charges accumulate, significantly impacting your overall expenses.
According to Chuck Bell, a director at Consumer Reports who has been advocating against junk fees for years, “We are dealing with nontransparent, deceptive pricing. Travel providers are hesitant to reveal the full price upfront, so they conceal it.”
While hotels may make it challenging to identify resort fees, various online resources consistently track and monitor these charges. For instance, Resort Fee Checker allows you to search for a hotel and view whether it imposes resort fees and, if so, the corresponding amounts. NerdWallet, a personal finance site, conducted an analysis that identified Wyndham Properties, Hyatt, and IHG as the top offenders, charging an average of 3.8 to 6.5 percent of the total room cost as resort fees.
Another recommended practice is to check prices directly through a hotel’s website rather than relying on third-party agencies like Expedia or Priceline. Hotels often impose different resort fees for those who book through third parties. Furthermore, enrolling in hotel loyalty programs often grants returning customers exemption from resort fees.
Airlines exacerbate the issue by presenting additional fees late in the ticket booking process. After selecting a flight and providing your personal information, you are then informed of the costs associated with seat selection or checked baggage.
A valuable rule of thumb, suggested by Mr. Harteveldt, is to familiarize yourself with the business model and fee structure of different airlines. It has become common knowledge that budget airlines, offering cheaper tickets, compensate for the lower prices by charging higher fees for basic amenities like seat selection and luggage.
In February, an analysis conducted by NerdWallet revealed that Frontier and Spirit Airlines charged the highest fees for seat selection, while Alaska and Hawaiian Airlines charged the least.
If you choose an airline that imposes fees for seat selection, you have the option to forego selecting a seat and hope to secure one through the customer service representative at the terminal. However, this is a gamble and may not be ideal for families.
If you aim to travel on a budget, investing additional time has become necessary. After gathering the prices from each vendor, calculate the total expenses, including all fees. Only then will you be able to make accurate cost comparisons.
Ideally, we should not have to engage in this process in the future. Doug Farrar, a spokesperson for the FTC, stated that the agency aims to eliminate junk fees by establishing rules that regulate these practices, rather than merely providing consumers with advice on dealing with surprise charges.
“We’re going to try to end it,” Farrar said. However, he added, “Strictly speaking, I don’t think you can avoid it. It’s just baked into the process.”
Certain brands are proactively adjusting their practices in anticipation of regulatory action. Marriott International, for instance, recently updated its room rates to incorporate resort fees when customers search for bookings through their app and website. Hyatt has expressed plans to do the same.
Naturally, this does not guarantee an end to these fees, but it provides immediate awareness when a deal is not as appealing as it initially appears, allowing you to explore alternative options.
By remaining vigilant and informed, travelers can navigate the complex landscape of hidden charges and make more informed decisions when booking travel online.