Resort fees, facility fees, destination fees - additional charges that hotels impose on top of room rates, with various names depending on who collects them. However, critics use only one word to describe them: "junk fees."

In recent months, these fees have become increasingly unpopular, and a wave of legislation is attempting to sweep them into history.

"The American people are tired of being taken for fools," President Joe Biden said in his State of the Union address in February, directly referencing additional fees charged by hotels as well as institutions such as banks, airlines, and event venues. Months later, the Consumer Financial Protection Bureau (CFPB) began pushing to eliminate these fees,initially targeting mainly the fee policies of financial institutions。

Shortly after the CFPB pressured banks,California Governor Gavin Newsom called these fees"bad for consumers and bad for competition," and subsequently signed the nation's toughest anti-junk-fee law.

Meanwhile, two recent bills in Congress specifically target hotel fees.

Nevertheless, experts say that banning hotel junk fees may be more complex than it appears. Hotel Dive spoke with industry leaders about efforts to eliminate hidden fees, the difficulty of defining "junk fees," and the legislative strategies hotels might adopt in response.

Legislative action targeting mandatory hotel fees

According toa 2014 report by the Associated Press, the earliest known "resort fees" began in the late 1990s, initially appearing mainly at high-end resorts with abundant amenities such as tennis courts and large pools.

But news reports show that this practice spread to other types of lodging in the 2010s and became more common. A 2018 report by the Chicago Tribune noted that in the first half of 2017,the number of U.S. hotels charging resort feesincreased by 14% compared to the previous six months - and by 70% in major metropolitan centers such as New York, San Francisco, and Los Angeles.

Philip Ballard, chief communications officer of the group travel booking website HotelPlanner, said that during the COVID-19 pandemic, hotels "tried to make up for lost revenue," and fees continued to spread.

I think the label 'junk fees' is unfair to the hotel industry.

— Brian Mohler, partner in the real estate, hospitality, and litigation practice groups at Pryor Cashman LLP

But now, consumers, regulators, and even insiders in the hotel industry are increasingly dissatisfied with this phenomenon. As of 2023, resort fees seem to be under attack from all sides.

First, there are state-level initiatives. According to state officials, California's recently passed Senate Bill 478 is the toughest law in the nation against hidden fees.

Pennsylvania also has a similar bill -which recently passed the state House and is now under consideration in the state Senate- targeting junk fees across industries. State Representative Nick Pisciottano called it the "see-what-you-pay bill" in an interview with ABC 27 News.

In addition, there are efforts in the U.S. Senate and House: In July, Senators Amy Klobuchar (D-MN) and Jerry Moran (R-KS)introduced the bipartisan Hotel Fees Transparency Act; earlier this month, Representatives Young Kim (R-CA) and Kathy Castor (D-FL)introduced the No Hidden FEES Act。

Meanwhile, in addition to the Biden administration's efforts, lawsuits targeting the legality of surcharges at specific hotel companies (such asMarriottandHyatt) are also increasing.

Even hotel industry insiders, such as the American Hotel & Lodging Association (AH&LA),have expressed support for federal regulation。

So, does all this mean the end of resort fees?

"I've been following this issue for about six years, and my feeling is that the chaotic 'Wild West' days are over," said Brian Mohler, a partner in the real estate, hospitality, and litigation practice groups at Pryor Cashman LLP in New York. "Sooner or later, we will have a federal regulatory framework."

Broad industry support

In recent years, the increasing number of regulations and potential regulations around junk fees has made it difficult for hotel operators to figure out exactly how to comply.

"We want everyone to follow the same rules," Mohler said.

According to Mohler, this may be one reason the American Hotel & Lodging Association supports the Hotel Fees Transparency Act and the No Hidden FEES Act. "They just want fairness, so everyone can compete in the free market."

Currently, some hotel companies are more transparent than others in displaying additional fees. In May, Marriott International updated its rate display,to show the total price including the room rate and resort or destination fees. This move was in response to a $225,000 fine from Pennsylvania Attorney General Michelle Henry, who found that the company had failed to comply with a 2021 settlement requiring it to inform consumers about "hidden" fees.

"I think if I were Marriott, I would be happy about (broader regulation)," Mohler said, "because then it's no longer just targeting me."

Lauren Wolfe, an attorney for the traveler advocacy group Travelers United, is more skeptical of the industry's support. Referring to the wave of consumer and government support for junk fee legislation, she said: "I think the American Hotel & Lodging Association sees which way the wind is blowing."

The fight against 'junk'

However, effectively regulating junk fees can be complex. First, it raises the question: What is a junk fee? Of course, hotels don't label their fees as "junk."

Saying (resort fees) cover amenities is hotels lying and making people believe they are actually paying for a service, when in fact they are not.

— Lauren Wolfe, attorney for Travelers United

"I think the label 'junk fees' is unfair to the hotel industry," Mohler said. "The FTC's definition of junk fees is much more malicious. ... I think hotel companies have tried their best to show that if you pay me a $30 resort fee, I'll give you back more in value."

Wolfe disagrees. "I really don't think (resort fees) cover anything," she said. "I think (hotels) saying they cover amenities is hotels lying and making people believe they are actually paying for a service, when in fact they are not."

Wolfe cited hotels operating during the pandemic as an example. "Hotels said the fee was for the pool, the gym, but then the pool and gym were closed, and you still had to pay the resort fee."

Hotel companies can also easily circumvent any legislation that prohibits fees with specific names.

"After Marriott's settlement with Pennsylvania, we immediately saw several Marriott hotels in the Midwest add a 'sustainability' fee," Wolfe said. "You get rid of the resort fee, and then a new fee pops up with a different name." (After reports about certain Marriott hotels charging a "sustainability" fee,a company spokesperson told The Independent, "We have contacted the franchisee to request removal of the fee.")

But hotels are also paying fees because they rely more than ever on online travel agencies (OTAs) to boost occupancy, said Ballard of HotelPlanner.

"OTAs also have fees. This shouldn't surprise anyone," Ballard said. "We don't call them 'hidden' fees, nor 'resort' or 'junk' fees. It's basically a markup for doing business, or an operating expense that keeps us profitable."

Ballard believes that despite AH&LA's expressed support, any federal fee legislation will face resistance from hotels because of the need to recover revenue. "There will be a lot of industry resistance," he said.

Wolfe agrees. "I'm sure these hotels will fight to the end; we've already seen them try to create new fees and try to get around this."

Circumventing the law

If hotels find ways to charge other surcharges not subject to anti-junk-fee regulations, legislative efforts become a game of whack-a-mole.

In Las Vegas, according to the Los Angeles Times,diners at restaurants on the Las Vegas Strip were surprised and confused by added charges on their bills. These fees are called "venue fees" or "concession fees" - sometimes abbreviated as the vague "CNF" - and Wolfe says they are becoming more common.

Unlike tips (which go to the server), the profits from these fees go directly to the owner of the resort where the restaurant is located.

Wolfe believes such fees also harm hotel employees. "We don't have official data, but we hear many complaints from hotel employees that when hotels charge resort or facility fees, consumers are confused, and then they stop tipping employees because they think it's a service charge," she said.

Wolfe noted that this is especially a problem at hotels that host guests from non-U.S. countries, where service charges often replace discretionary tipping.

Whether or not the fees are eliminated, consumer confusion highlights a point increasingly recognized by industry participants: clearly communicating the amount and purpose of fees goes a long way toward mitigating the frustration they cause.

"Transparency is the guiding light here," Mohler said. "I don't think there's anything wrong with charging a resort fee or whatever you want to call it. You provide a service for it, and people can say yes or no, but they can only choose if they know about it."

Although efforts are underway to require a higher level of transparency, actual enforcement may still take some time.

"I'm glad to see we're finally making a move," Wolfe said. "But I think it will be very difficult to push any legislation through Congress. Passing legislation is very, very difficult."

"That said," she added, "I think this is a bipartisan win-win issue, and you don't see that every day."