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Why a hotel bill or plane ticket isn't always what it seems - North Bay Business Journal

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.



This post first appeared on Travell, please read the originial post: here

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Why a hotel bill or plane ticket isn't always what it seems - North Bay Business Journal

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