19 December 2023
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On July 1, 2024, a comprehensive ban on pricing goods and services without including all mandatory fees will go into effect in California. This ban is the result of a bill recently signed into law by Governor Gavin Newsom, and similar proposed legislation has gained bi-partisan support from state governments and federal authorities. In the below article, JMBM partner Mark Adams discusses the implications of these legal developments for hotel owners. He emphasizes the need for full transparency to avoid financial penalties, litigation, and reputational damage.
The Final Check-Out: Bidding Farewell to Undisclosed Mandatory Resort Fees
by
Mark S. Adams, Hotel Dispute Lawyer
Partner & Senior Member
JMBM’s Global Hospitality Group®
Reprinted from the Hotel Business Review with permission from www.HotelExecutive.com.
In October this year, California Governor Gavin Newsom signed into law (effective July 1, 2024) a sweeping ban on pricing goods and services without including all mandatory fees or charges.
Presently pending in the U.S. Senate is a bipartisan-supported bill that would do the same.
These bills join state governments, federal authorities, state attorneys general, and consumer advocacy groups in intensified scrutiny of undisclosed mandatory resort fees included in hotel rates. Additionally, several state attorney generals and consumer groups are targeting hotels that charge undisclosed resort fees.
In response to this developing trend, it is imperative for hotel owners to quickly implement full transparency, revealing the total cost of mandatory resort fees upfront. Failure to do so may result in significant financial penalties, expensive litigation, and reputational damage among consumers, who often do not view these fees favorably.
What are Resort Fees?
Resort fees are extra charges imposed by hotels and resorts, ostensibly for providing certain amenities. This additional cost is typically calculated daily and added to the basic room rate. Resort fees are sometimes relabeled as a facility fee, destination fee, amenity fee, urban fee, or resort charge. In the end, they are all the same thing; and even if a guest does not actually use the amenities associated with the resort fees, they are still required to pay for them.
Consumer Complaints About Hotel Resort Fees
Resort fees have become a significant point of contention for consumers worldwide. These mandatory charges, often added to hotel bills after booking, have been criticized for their lack of transparency and fairness. Many consumers claim to be blindsided by these additional charges, only realizing they are being charged a resort fee when they check out. This lack of upfront disclosure makes it difficult for consumers to accurately compare room costs and budget for their stay. CONTINUE READING →