Consumers win a small victory


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Within a week or two, Marriott hotels will start to post hotel rates as inclusive of mandatory hotel-imposed fees on its own website. This move represents the end of a minor skirmish in the struggle against deceptive hotel pricing — the end result of an agreement between Marriott and the state of Pennsylvania requiring Marriott to post all-up fee-inclusive rates most prominently on its own search pages.

It’s a win for consumers, but not a big win. Although Marriott must provide full fee information to third-party online travel agencies and metasearch systems, it cannot force those third parties to display rates honestly. And, unfortunately, those are the places many of you go to find good hotel deals.

In case you haven’t been following my reports — and occasional rants — on the subject, the culprit here is the practice of hotels’ featuring untrue low-ball prices and subsequently adding in a mandatory fee. To oversimplify, say a hotel wants to get $160 per night for a room. Instead of posting $160 as the price, it posts $100 and adds the $60 back in as a mandatory fee just before you hit the “buy” button. In some cases, third-party offers such as air-hotel packages don’t tell you about the extra until you arrive at the hotel.

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The deception started among hotels in popular mass-market and price-competitive vacation centers such as Hawaii and Las Vegas. The hotels called the carved-out portion of the true rate a “resort” fee and posted a list of the services and amenities the fee was supposed to cover. That was nothing more than a smoke screen: If a fee is mandatory, it makes no difference what it supposedly covers.

You probably heard of Gresham’s Law in Econ 101: Bad money drives out good money. There’s a Gresham’s law about advertising too, deceptive advertising drives out honest advertising. I’ve long contended that in the travel industry, nothing catches on faster than a bad idea, and soon hotels in completely non-resort areas were adding mandatory fees, with names such as “destination” and “facility” fees that basically mean bupkes.

This case serves as an interesting illustration of government action against deceptive advertising. Deceptive hotel pricing is clearly a national problem, involved in interstate commerce — reason enough for the federal government to get involved. And there is a federal agency charged with policing deceptive advertising: the Federal Trade Commission (FTC). There’s no question that the FTC has previously recognized that the practice, which it calls “drip pricing,” is inherently deceptive. Several decades ago — so far back that I can’t find any records on the internet — the FTC took action against tour operators who were carving out part of the real price of a package, featuring the remaining low-ball figure as the price, and adding the carve-out separately as “tax and service.” Of course, it was neither, and after a two-year study to arrive at a conclusion it should have reached in two hours, FTC took action.

Recently, however, FTC hasn’t bothered much to protect consumers. A couple of years ago it sent a “tsk tsk” letter to hotels, with no follow up. It currently has a new investigation going — finally — but the outcome is uncertain.

Meanwhile, other government agencies have taken the lead. A few years back, the Florida attorney general got a cruise line to forego fake splits of “port charges” out of true prices. And Pennsylvania brought the case against Marriott.

So as consumers, here’s where you stand. Marriott will list prices honestly on its own website. Period. It can and will still furnish phony prices to search systems and other third-party agencies. No other hotel chain has agreed to similar terms. And no government agency at any level has yet taken any action against any online search system. Fortunately, at least one system lets you compare true all-up costs of what a hotel night will cost from the get-go of your search. If you aren’t already using as your primary search tool, switch now.

(Send e-mail to Ed Perkins at Also, check out Ed’s new rail travel website at

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