Amid mounting U.S. legislative pressure on “junk fees,” hospitality industry leaders say they welcome regulation as long as it is evenly applied across the lodging sector as a whole.
“Our position is that, yes, all fees should be disclosed upfront, but it should be applied equally to everyone in the industry,” said American Hotel & Lodging Association CEO Chip Rogers during an interview at January’s Americas Lodging Investment Summit. “What we were worried about was that it would only apply to hotels but not be applied to short-term rentals or online travel agencies.”
From the Window Seat: The inhospitable junk fee
According to Rogers, the AHLA has worked closely with legislators to ensure that the Junk Fee Prevention Act, introduced by Sens. Richard Blumenthal (D-Conn.) and Sheldon Whitehouse (D-R.I.) early last year, effectively addresses those concerns.
Under the bill, hotels and other accommodations providers would be required to “clearly and conspicuously display, in each advertisement and when a price is first shown to a consumer, the total price of the good or service provided by the covered entity,” inclusive of any mandatory fees.
“The legislation that we’ve had introduced, in a bipartisan fashion, would treat all lodging entities the same,” Rogers said. “It would apply to hotels and would apply to Expedia, Travelocity, Booking and [other OTAs] as well as to short-term rentals.”
Marriott International CEO Anthony Capuano took a similar stance at the lodging summit, saying Marriott has been apprehensive regarding resort fee-related crackdowns because they historically left OTAs out of the conversation.
Marriott has been required to include mandatory fees in its room rates since mid-May of last year, in response to a Pennsylvania consumer-protection investigation and eventual court settlement in 2021.
“Our hope is that there will be a level playing field across all travel providers — not only the branded companies but the travel intermediaries,” Capuano said. “That’s not where we are yet. And so, we’ve had some concern about whether that would put us at a competitive disadvantage.”
Capuano, however, emphasized that Marriott is firmly pro-transparency when it comes to mandatory fees.
“The recent changes we made were not a start to being transparent on fees, they were simply an enhancement to transparency that we already offered,” he said, adding that he also takes issue with categorizing resort fees under the umbrella term “junk fees.”
“To me, the definition of ‘junk fees’ is just extra fees being piled on with no related value,” Capuano said. “A hotel general manager in our system can’t just wake up one morning [and decide] they’ll charge a resort fee. We have a rigorous process. If a hotel thinks they can offer real value, they make a proposal that we review and either approve or decline, and they have to provide meaningful, demonstrated value for that fee.”
The Junk Fee Prevention Act isn’t the only regulatory action taking aim at resort fees and other mandatory charges.
Last fall, the Federal Trade Commission proposed a rule intended to eliminate “unfair or deceptive fees.” ASTA submitted comments in support of the proposed rulemaking last month, with Peter Lobasso, the Society’s senior vice president and general counsel, stating that restricting mandatory fees would “greatly benefit consumers of hotel and other short-term lodging services.”
Lobasso also echoed the sentiment that hotel fee transparency be equally applied across all booking channels.
“ASTA strongly believes that all consumers, regardless of where or how they choose to book their travel, have a right to expect that hotels, as well as OTAs, short-term rental intermediaries and other distributors of lodging services, provide complete pricing information,” Lobasso said. “The full disclosure obligation should apply uniformly irrespective of the distribution channel or medium used by the consumer when booking a hotel room.”
California, meanwhile, has moved forward with its own junk fee-related legislation, with Gov. Gavin Newsom signing state Senate Bill 478 into law in October. The bill, which goes into effect on July 1, bans businesses from “advertising, displaying or offering a price for a good or service that does not include all mandatory fees.”
Rogers hopes that the Junk Fee Prevention Act will tackle the issue at a more comprehensive, national level.
“There are probably five or six other states that are [mulling similar legislation] this year, but what we don’t want is a patchwork of 50 different rules,” Rogers said. “The problem we’re facing is that even though we have bipartisan support in Washington, D.C., it’s so difficult to get legislation moving, and so that bill is just sitting there. But we really do need a federal answer to this.”
