Consumers on the hunt for hotel accommodation are likely being harmed if mandatory resort fees are not included in posted price of nightly room bookings, according to a paper released by the Federal Trade Commission on Thursday.
The issue paper, which was authored by an FTC economist, found that the hotel industry’s practice of posting room rates separately from mandatory resort fees makes it more difficult for consumers to compare prices.
“Separating resort fees from the room rate without first disclosing the total price is unlikely to result in benefits that offset the likely harm to consumers,” the study found.
Resort fees are per-room, per-night, mandatory fees charged by some hotels for services such as Internet access, parking and health club access. In 2015, the paper notes, consumers paid resort fees estimated at about $2 billion, 35 percent higher than the previous year.
Consumers who are trying to comparison shop, either through hotel websites or through online travel agent sites, are often given a room rate at first that excludes mandatory fees. Consumers are forced to click through multiple pages before they are given the total price, the study found.
This leaves them with a choice “either to incur higher total search and cognitive costs or to make an incomplete, less informed decision that may result in a more costly room, or both,” the study said.