Are resort fees and destination fees legal?

Short answer: Yes, resort fees and destination fees are generally legal in the U.S., but the Federal Trade Commission (FTC) views mandatory fees that are not included in the advertised price as potentially deceptive and unfair practices, thus actively scrutinizing them [S1, S2].

Resort fees and destination fees, often termed "junk fees" by regulators, are mandatory charges added to the advertised base price of hotel rooms, typically covering amenities like Wi-Fi, fitness center access, or local calls [S1, S2]. While not inherently illegal, their legality hinges on how transparently they are disclosed to consumers.

Regulatory Scrutiny

The Federal Trade Commission (FTC) has expressed significant concerns about the deceptive nature of these fees. In 2012, the FTC sent warning letters to 22 hotel operators, stating that failing to include mandatory resort fees in the initial room rate may violate Section 5 of the FTC Act, which prohibits unfair and deceptive practices [S3, S4]. The primary issue is "drip pricing," where the initial price presented to the consumer does not include all mandatory components, leading to an unexpectedly higher final cost [S1, S2].

President Biden's administration has also targeted these "junk fees" as part of a broader effort to promote fair competition and lower costs for American families, urging agencies like the FTC to crack down on these practices [S5, S6]. Several states, including California and Nebraska, have passed or are considering legislation to mandate upfront pricing for hotel rooms, requiring all mandatory fees to be included in the advertised rate [S7, S8].

Consumer Impact

From a consumer perspective, these fees can obscure the true cost of accommodation, making it difficult to compare prices across different hotels [S1]. A study requested by the FTC found that including all mandatory fees in the upfront price would save consumers time and effort and could lead to hotels competing more on price [S1]. The fees can also frustrate travelers who feel misled about the total expense of their stay [S2].

What to do:

Always check the fine print for additional mandatory fees when booking accommodations [S1].
Compare total prices, including all fees, when evaluating different hotel options [S2].
Consider filing a complaint with the FTC or your state's Attorney General if you encounter undisclosed or deceptively presented mandatory fees [S1, S9].
Inquire at check-in about any fees you don't understand or believe were not clearly disclosed [S2].

Sources

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