We previously reported on regulatory efforts by the Biden administration to restrict the imposition of hidden, mandatory junk fees by tourism and entertainment operators (“Junk Fees: A Pricing Tactic that May Be Checking Out”). These fees, charged by hotels, airlines, and ticket agencies, get added on to the final price, after the operators have lured customers into the purchase process by advertising a lower initial price. They might feature labels like “resort fee,” “convenience charge,” and so on, but according to legislators, they are a money grab, by any other name.

Some hospitality industries and firms have responded by promising to eliminate the extra costs, but others are taking a different tactic: Reframe them. For example, an independent hotel in California touts its value-added offerings of “free” electric vehicle charging, local calls, and internet, all included in a $30 destination fee package. But the package itself is mandatory. So it remains a junk fee, because visitors who do not have an electric car or do not need to make local calls from their room cannot turn down these features or avoid the fee.

Marriott Hotels in Los Angeles also have been accused of illegally charging guests to cover the costs of paying housekeepers more, as mandated by a local worker protection law. That is, the law requires hotels to provide their cleaning staff extra compensation once they clean more than a specified number of square feet per 8-hour shift. Allegedly, Marriott simply passed on those costs to guests, with a fee that appeared on bills as the “Hotel Worker Protection Ordinance Cost Surcharge.”

Rather than hiding them behind confusing names, another approach instead makes the extra charges more transparent. Some hotels add a bed sheet fee, a towel fee, and a concierge fee, on top of the room rate. It is a bold move; customers seem likely to expect that the sheets are included in the rate they pay to rent a hotel room. But the hotels apparently are confident that the current U.S. Congress will be unable to reach consensus on any law, so they do not expect to be held legally liable for such moves any time soon.

For consumers, it thus seems like the onus is on them. If guests believe they should receive towels every time they book a room, not because they pay an extra fee, they are going to need to demand such charges be removed from their bills. But most hotels still try to keep such fees at least a little hidden. Anecdotal evidence suggests that hotel operators express embarrassment when challenged about the fees. At the same time though, many guests lack the patience or time to review their bills closely, then follow up by disputing the charges. Thus, for the time being, it appears that the junk (fee) removal process is at a standstill.

Discussion Questions

1. Are junk fees a legitimate pricing tactic or an unfair strategy? Does your answer change, according to how hotel operators are responding to threats to make them illegal?
2. If you found extra, undisclosed fees on your hotel bill when you went to check out, would you contest them?

Sources: Christopher Elliot, “Hotels Are Returning Fire in the ‘Junk Fee’ War. Don’t Be a Casualty,” USA Today, August 7, 2023