New Bill Targets Hidden Fees in Hotels and Short-Term Rental

A traveling suitcase awaits a vacation in a bedroom.

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A new bill has been introduced that would require anyone advertising a hotel room or short-term rental to clearly disclose all fees in their advertised rates that a customer would pay.

The Hotel Fees Transparency Act, introduced by Sens. Jerry Moran (R-KS) and Amy Klobuchar (D-MN), is in line with the Biden administration’s push to eliminate hidden surcharges and so-called “junk fees” across industries to improve cost transparency for consumers.

The bill is supported by the American Hotel & Lodging Association (AHLA), which said that its most recent data show that 6% of hotels nationwide charge a mandatory resort, destination or amenity fee at an average rate of $26 per night. AHLA, the largest U.S. hotel association, has a membership that includes major hotel chains, independent hotels, management companies, real estate investment trusts as well as bed and breakfasts.

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The bill would create a single standard for mandatory fee display across the industry, from hotels to online travel agencies, metasearch sites and short-term rental platforms, Chip Rogers, AHLA president and CEO, said in a statement.

Creating a single standard

“We know consumers shop for travel across multiple sites, and this bill is a pivotal step toward creating a more transparent booking process for guests,” Rogers said.

“High prices are forcing Kansans to account for all their expenses, and they should not need to guess how much they will end up paying for a hotel room,” Moran said in introducing the legislation on July 27. “This commonsense legislation requires hotels and other short-term lodging providers to display and advertise the total price of their room, so Kansans can be certain that the listed price is what they will pay at check out.”

Too often consumers making reservations online are met with hidden fees that make it difficult to compare prices and understand the true cost of an overnight stay, Klobuchar said. “This bipartisan legislation would help improve transparency so that travelers can make informed decisions,” she added.

In his State of the Union address last February, Biden named several industries that he said have taken advantage of junk fees. These include, he said, hotels as well as airlines, credit card companies, concerts and sporting events, cable and Internet providers and cell phone companies.

“We’re going to ban surprise resort fees that hotels charge on your bill,” he said. “Those fees can cost you up to $90 a night at hotels that aren’t even resorts.

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.