Senator calls on FTC to end drip pricing

The Federal Trade Commission (FTC) should require hotels to disclose so-called tail-end fees on the front end, a U.S. senator contends in a letter to the federal agency.

U.S. Sen. Bob Casey, D-Penn., says travelers are seeing hotels advertised online for one rate only to see the full charge substantially increase as they complete the booking process. The practice, known as drip pricing, helps hotels offer competitive prices on major travel sites where travelers look for deals, according to Casey

“This hinders the consumer’s ability to make a complete, informed decision in choosing the right hotel,” Casey wrote in a letter to Mary K. Engle, associate director of the FTC’s Division of Advertising Practices. “In addition, such practices that misrepresent the hotel room reservation price quoted to consumers may be in violation of federal law that governs deceptive commercial practices.”

According to Casey, the FTC in 2012 warned some hotels about the practice, but it did not lead to an end to the approach.

“For some time, consumer advocates and members of the public have called for improvements in advertising regulations to require resort fees—such as charges for newspapers, onsite exercise facilities, Internet access and other amenities—to be clearly disclosed throughout the shopping and reservation process,” Casey wrote.

“While I applaud the Commission’s previous actions calling for several companies to review their websites to ensure proper representation of the total reservation price paid by consumers, some companies have continued to engage in misleading advertising practices,” Casey added. “American consumers deserve a higher industry standard in this regard.”