WASHINGTON (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.
The FTC’s 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.
“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 states.
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.