Hidden Resort Taxes

Resort taxes


Federal Trade Commission Chair Edith Ramirez has asked Congress to make hidden hotel fees more obvious to travelers. But lodging taxes might be just as big an issue.

Ramirez is responding to a December letter from 10 members of Congress asserting that it's unfair for hotels to charge mandatory "resort fees" that weren't included in the advertised rate. Such fees pay for things like pools and fitness centers, but guests are expected to pay them regardless of whether they used those amenities. The letter cites a poll saying that 80 percent of Americans believe that if a fee is mandatory, it should be included in the baseline price.

Yet resort fees are only half the problem. A 2015 study by HVS, a hospitality consulting firm, examined the 150 most populous U.S. cities. After taking all state, county, city, and special district taxes into account, it found that the average hotel tax was approximately 13.5 percent. Cities with the lowest rates (Fontana and Moreno Valley in California) rake in 8 percent, while Kansas City, Missouri, tops the list at 18.5 percent. Unlike the resort fees, these taxes can't be avoided by staying in humbler accommodations.

If Ramirez finds hidden costs disturbing, she should consider the ways government is contributing to the problem.