Hidden fees for hotels, other lodging on the chopping block?

The push to ban ‘junk fees’ gets strong support in Congress. How did NJ members vote?

Benjamin J. Hulac, Washington Correspondent | July 9, 2024 | Politics, More Issues

Credit: (AP Photo/Susan Walsh)
June 15, 2023: President Joe Biden discusses his administration’s push to end “junk fees” that surprise customers. Tobi Parks, CEO of xBk (left) and Lael Brainard, assistant to the president and director of the National Economic Council, right, listen.

WASHINGTON — Hotels, motels, inns and other places for short-term lodging would be required up front to show all the fees customers must pay to stay there under legislation working its way through Congress.

The bipartisan bill (H.R. 6543), which the House passed 384-25 in June, would also apply to online companies that advertise hotel accommodations.

“Hotels and online travel agencies have many names for these types of fees, such as resort fees, amenities fees, facilities fees, to name just a few,” Rep. Frank Pallone (D-6th) said during floor debate about the legislation.

The bill empowers state attorneys general and the Federal Trade Commission, an independent agency that regulates consumer affairs, to enforce its provisions.

So-called junk fees have been a point of focus for the Biden administration and an area of bipartisan agreement this Congress.

Other pro-consumer legislation

The House passed a separate bill (H.R. 3950) in May to require entertainment companies that organize live events, like sporting matches or concerts, to disclose the full price of those events upfront to customers.

In February, the Consumer Financial Protection Bureau, a federal agency, proposed new rules to limit how much banks can charge customers when they overdraw their bank accounts.

A separate Biden-era proposal from March would limit hidden costs and fees for students who take out loans to pay for college.

“Regardless of what they are called, surprise fees that consumers do not expect make it impossible to comparison shop and impose undue burdens on household finances,” Pallone said of the short-term lodging bill.

‘When one business can mask the true cost of their product or service behind hidden fees, it makes their offering seem more affordable than their competitor.’ — John Breyault, National Consumers League

It would cost the FTC $4 million to implement the bill’s provisions and watch for and enforce penalties for violations, the nonpartisan Congressional Budget Office said in an estimate.

During a hearing in September, John Breyault, vice president of public policy, telecommunications and fraud at the National Consumers League, an advocacy group, said hidden hotel fees totaled $2.7 billion in 2017, “a figure that had undoubtedly grown.”

Airbnb fees

The legislation would also require Airbnb, which lets homeowners rent their space to guests, to disclose up front the costs of cleaning fees to visitors, Breyault said.

“All-in pricing requirements are particularly effective at promoting competition,” he said. “When one business can mask the true cost of their product or service behind hidden fees, it makes their offering seem more affordable than their competitor.”

“Americans don’t need to be hit with unexpected fees added to their hotel room bookings, which happens all the time,” said Rep. Gus Bilirakis, a Florida Republican who voted for the bill. “These resort fees often confuse and deceive consumers.”

The American Hotel and Lodging Association, a business group that represents the hotel industry, said it supports the legislation because it would create a national standard for disclosing fees to the public.

All New Jersey House members voted for the bill, except Reps. Josh Gottheimer (D-5th) and Bonnie Watson Coleman (D-12th). Neither voted on the legislation.

A spokesman for Gottheimer, one of the bill’s sponsors, did not respond to a request for comment about why the lawmaker did not vote.

Watson Coleman has been out of Washington since early June due to lower back pain and surgery. She is expected to return for votes this month.