Hidden hotel fees latest travel gouge racket

By DENISE McNABB

Hefty fees and taxes tacked to air tickets are irksome enough, but business travellers heading to the United States are being doubly stung.

Hotels marketed primarily at corporate travellers are slapping fees on almost everything imaginable in the latest racket that has already spawned two civil class actions.

In many cases these extra charges add up to more than US$100 ($208) for a three-night stay.

And it's not just in the US. Asian hotels add 10 per cent service charges and room charges. In Hong Kong these come on top of a 3 per cent government room tax.

US hoteliers have been progressively introducing fees for different services over the past few years. Mini bars and telephone calls have long been commercial hazards.

But since the September 11 terrorism acts, charges have been escalating as hotel chains try to stave off financial losses after their large corporate clients stayed away in droves.

Fee hikes were considered a safer option because raising room rates to compensate for lower occupancy risked ostracising loyal customers when they returned to do business.

But many of these newly created fees are being added sneakily into bills at checkout with no warning of their existence. These include (in addition to tipping) charges to cover luggage handling, facilities use, health club and spa use, poolside towels and chaise lounges, room service, security, higher electricity costs, valet parking, newspapers (once left outside the door for free) and coffeemakers.

Some hotels even have "resort" fees to cover gratuities to guest services staff, use of putting greens, beach umbrellas, email access, incoming faxes, in-room safes and other miscellaneous offerings whether they are used or not.

One of the two class actions taken by a disgruntled customer that spread nationwide has resulted in an out-of-court settlement.

It involved the Wyndham International chain, owner of one of three Florida hotels at the centre of action over hidden energy charges slapped on checkout bills last year to cover increased electricity costs.

As customers were not told in advance of the US$2.50 to $3 ($5 to $6) nightly charge, it was "clearly deceptive and contrary to state law" to be quoted one price and charged another, said Florida's Attorney General, Bob Butterworth.

Wyndham decided against fighting the case because it was not confident its employees had given proper notification of the charge "in each and every instance". The chain agreed instead to give all guests who paid the fee last year a US$15 ($30) rebate off a future guest night.

The other class action is being taken in the New York Supreme Court against Starwood Hotels, the parent company of Sheraton and Westin Hotels.

At issue is a charge of US$12.78, listed as "room tax" by Sheraton Bal Harbour Beach Resort. The complaint is that it was not required by any government authority, therefore is not a tax.

Sheraton's New Zealand sales manager for travel management companies, Wendy Steele, said New Zealand hotels did not charge fees like their US counterparts. The only cost added on to bills (apart from personal expenses) was GST, she said, and GST was pointed out to guests in advance.

She did not know of any New Zealand hotels that charged like the American business hotels.

The introduction of GST to Australia a year ago ended an unpopular 10 per cent bed tax levied on room nights at inner-city Sydney hotels and a 5 per cent bed tax charged on Northern Territory accommodation.

There have been recent signs that the fee racket is easing in the US following bad publicity.

Five-star hotels have used the publicity to market themselves as fee-inclusive.

And Wyndham, the chain at the centre of the class action, has now started a loyalty guest scheme that gives its members free phone and incoming faxes. Membership is free, but there is a catch. Guests must stay at one of its properties before September 30 to qualify.