(Legal Newsline) – The Federal Trade Commission (FTC) announced Jan. 5 the
release of an issue paper authored by an FTC staff economist concluding
consumers are likely being harmed by resort price listing practices.
Bureau of Economics sponsored the paper, which took a look at the hotel
industry practice of disclosing mandatory resort fees separate from posted room
rates without first disclosing the total price of the room.
Many resorts will
list a price on the booking page, but will then tack on various fees, such as
internet access, parking fees or health club access fees. In 2015, consumers
paid $2 billion total in resort fees, the FTC states. This figure represents a 35 percent
increase from the previous year. The FTC determined that consumers are likely
being harmed from this business practice.
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
practice makes it much harder for consumers to comparison shop for hotels.
Mandatory resort fees force them to look through more web pages and calculate
total prices on their own – which forces them to incur higher total search and
cognitive costs or else make a less informed decision.