Why a hotel bill, plane ticket isn’t always what it seems. Now, California lawmakers want reforms

For anyone buying a concert ticket, a night at a hotel or an airline seat, the listed price is seldom what someone actually ends up paying. Usually, it's higher.

And many times, the reason is added fees.

Now some California and federal lawmakers want to stop the practice of what they call “junk fees.” State Senate Bill 478 would “make unlawful advertising, displaying, or offering a price for a good or service that does not include all mandatory fees or charges other than taxes imposed by a government.”

"The price you get upfront is people trying to lure you to buy their product or service, but by the time you check out the price is different,” said state Sen. Bill Dodd, D-Napa, who introduced the hidden fees legislation with state Sen. Nancy Skinner, D-Oakland. The Senate Judiciary Committee is scheduled to discuss SB 478 on April 11.

Hotel resort fees

Dodd and others single out hotel fees as being obscure to customers. But when reached by the Journal, many managers and companies at several North Bay lodging properties declined comment on SB 478 or did not return inquiries.

In a call from the Journal to the reservation desk of the Silverado Resort in Napa the person answering the phone said a $35 a night "resort fee" covers housekeeping, bellmen, WiFi, heat and all in-room amenities. That fee does not show up on the reservation until after the room is booked. SB 478 would prohibit that practice.

Reached by phone, the manager at the Cavallo Point Lodge in Sausalito, who declined to give his name, said the $60 a night resort fee includes access to the hot tub, hiking trails, yoga, history walks, parking and more.

“Guests are fully aware of the fees associated with staying here and commit to that when they book their reservation,” he said.

Asked about its practices, the Carneros Resort and Spa in Napa chose not to make an official statement. According to an employee on the reservation desk, the non-negotiable $60 a night resort fee includes a daily newspaper, WiFi, free calls, parking, fitness center and classes, wine welcome, electric vehicle charging, bikes when available, and weekly events on the property.

At the Hyatt Regency Sonoma Wine Country in Santa Rosa a $35 destination fee is added to each night’s stay. However, when it comes to an itemized online bill for one night the destination fee is $40.14.

Monica Hubert, interim general manager, said, “Destination fees are subject to taxes. Taxes include occupancy tax, county tax, city tax and California assessment fee.”

So, the advertised price of $171 for one night at the Hyatt Regency Sonoma is actually $235.41 after paying a $8.55 tourism fee, $15.39 occupancy tax, $40.14 destination fee, and 33 cent state tourism fee. This is all clearly detailed online.

The Hyatt’s destination fee provides access to the fitness center, pool, hot tub, yoga, lawn games, pool toys, wine and beer tasting discounts, and water refill stations.

When calling a handful of reservation clerks in the North Bay they did not readily know what the resort or destination fee at their respective properties included, and one person took 15 minutes to come back on the line to answer the question.

Government intervention

The Consumer Federation of California, a nonprofit advocacy group for consumer rights, is also concerned about fees levied on the public that are less than straight forward or evident from the start of a transaction.

“A number of industry sectors have convenience fees. They ought to be disclosed,” Executive Director Robert Herrell told the Journal.

The group is backing a six-bill package (see box) targeting specific industries that attach junk fees to rental housing, small business financing, electric vehicles, event tickets, lodging, and car rentals.

State Attorney General Rob Bonta is advocating for the passage of the Dodd-Skinner bill.

“Transparency and full disclosure in pricing are crucial for fair competition and consumer protection,” Bonta said in February in announcing support for the legislation. “Unfortunately, from car rental and hotel fees to concert ticket service charges, these hidden costs have been normalized in the purchasing process. Today’s legislation seeks to hold businesses accountable for their deceptive and misleading practices at the expense of the financial security of millions of Californians.”

At the federal level, the administration and a handful of federal agencies are backing the Junk Fee Prevention Act which President Biden mentioned in his February State of the Union speech.

“We’ll ban surprise resort fees that hotels tack on to your bill. These fees can cost you up to $90 a night at hotels that aren’t even resorts,” Biden said. “We’ll make cable internet and cell phone companies stop charging you up to $200 or more when you decide to switch to another provider.”

At the regulatory level, the Federal Trade Commission in October said it was going to begin exploring regulations that would curtail or stop the practice of junk fees.

“No one has ever felt that a ‘convenience fee’ was convenient. Companies should compete to provide the best quality at the best price, not to see who can squeeze the most added expenses out of consumers,” FTC Chair Lina Khan said in a statement.

The Consumer Financial Protection Bureau this year proposed a rule that could take effect in 2024 that would cap credit card late fees at $8. The bureau said those fees currently average $31. The collective savings to consumers could be $9 billion a year, the bureau reports.

Some of the other so called junk fees being targeted include charges applied by rental car companies, on airport parking, restaurant service fees, food-delivery charges, and the automobile industry.

United Airlines was the first airline to heed the call for change with the elimination in March of its hidden fee for parents wanting to book seats with their children. American Airlines, Alaska Airlines and Frontier Airlines followed suit with the promise to do the same.

Slow to react

Some advocacy groups with members that would inevitably be impacted by at least some of the proposed legislation are on the sidelines for now.

The California Travel Association, a membership organization that lobbies for the industry, met at the end of February with SB 478 on the agenda.

After the meeting, Emellia Zamani, director of government affairs, emailed the Journal saying, “CalTravel still doesn’t have enough information to take a position on SB 478. I think we’ll know more as the bill gets closer to its first policy committee hearing this spring.”

Sonoma County Tourism deferred to CalTravel, saying it does not take a stand on legislation. Marin Convention & Visitors Bureau also does not take positions on laws. Officials with Visit Napa Valley also said they no opinion on the bill and also said to contact CalTravel.

All of these tourism agencies have multiple partners who would be affected by any law curtailing junk fees.

However, the California Hotel & Lodging Association doesn’t believe it would affect a large number of its members.

“Resort fees no longer are common practice, with only about 7% of California hotels currently using them. These, typically, are properties that have far more available amenities than other lodging facilities,” Pete Hillan, spokesman for the association, told the Journal.

He did not provide a list of those properties.

The trade group has about 2,100 members. Seven percent would be 147 properties.

This is on par with the American Hotel and Lodging Association which says 6% of hotels in the U.S. charge a resort fee.

Hillan contends, “The small number of California hotels that have resort fees fully disclose to guests the charges up front.”

When it comes to SB 478, Hillan said the lodging association has not taken a position. Nor has the Golden Gate Restaurant Association

“What we have always advised our members is if you are going to include a service charge, you need to make it clear on the menu,” said Amy Cleary, director of public policy and media relations for the San Francisco-based trade group.

Who would be affected

To Chang Seob Yeo, an associate professor of marketing at the Barowsky School of Business at Dominican University of California in San Rafael, the solution could be an ala carte approach with customers paying a base fee, then extra for amenities like an in room coffee pot and coffee, an iron, pool access and other items.

“Eventually it could be an opportunity to have substantially competitive advantages over others,” Yeo told the Journal. This is because hotels would be providing guests with exactly what they want instead of people feeling like they are paying for things they aren’t using.

Yeo believes SB 478 will be a positive for consumers if there is full disclosure upfront on what the final price is on whatever they are purchasing.

It’s not just hotels that would have to alter the structure of advertised prices.

When booking tickets online at Sonoma Raceway the two $125 tickets ended up being $170 instead of $150. That $20 difference went to Ticketmaster, according to spokeswoman Brandy Falconer.

She said, “We don't have hidden fees. We are not wanting to make a statement.”

A box office employee said when buying tickets online about an 11% fee is added to the cost of the tickets. However, if people go through the box office in person or via the phone they can pay an annual $10 fee and eliminate all other surcharges.

Luther Burbank Center for the Arts in Santa Rosa adds a 10% or 15% convenience fee to each ticket purchased online or by phone depending on the type of show.

“Any ticketing fees that we have go directly to pay for the ticketing system,” Anita Wiglesworth, vice president of programs and marketing, told the Journal. “It’s a huge expense for the ticketing software and the box office staff who have to pull those tickets and organize it.”

People can avoid the fee if they purchase tickets in person.

Many venues, including Luther Burbank, can’t eliminate fees by incorporating them into the base price of a ticket without restructuring how entertainers are paid, which is usually a percentage of ticket sales.

Wiglesworth also wonders if there will be special provisions for nonprofits carved into SB 478.

“The bottom line is we support being transparent to patrons and communicating what they need to know,” Wiglesworth told the Journal.

Kathryn Reed is a journalist who has spent most of her career covering issues in Northern California. She has published four books, with the most recent being “Sleeping with Strangers: An Airbnb Host’s Life in Lake Tahoe and Mexico.” She may be reached at kr@kathrynreed. com, or follower her at kathrynreed.com, Twitter @Kathryn0925, or Instagram @kathrynreed0925.