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CHLA Spring 2014

28 California Hotel & Lodging Association SPRIng 2014 One significant practical problem for hotels concerns reservations that are made through central reservation systems (e.g., franchisor reservation systems (CRS)) or through third-party on-line booking engines (OTAs, such as Travelocity, Expedia, hotels.com, and Priceline.com). The substance of the problem is that hotels that take reservations through CRSs and OTAs have little or no control over what these services put in their web site listings, or what information they provide on phone calls, etc. The California Hotel & Lodging Association spoke recently with the FTC, and this is the information they provided: • Hotels must provide to CRS operators and OTAs all information regarding any and all mandatory surcharges, fees, or other amounts that are not contained in the basic room rate. This information should include a description of the nature of the charge (e.g., “resort fee,” “amenity surcharge,” “energy surcharge,” parking fee), the amount of the charge, and whether or not it is taxable. • CRSs and OTAs need to disclose this information to consumers, and to be sure that consumers are informed of the total cost they will be required to pay. • For reservations made via the Internet, the FTC recommends that all such mandatory surcharges/fees be displayed as a separate line item in the breakdown of the costs of the room. For example, the information needs to be displayed early in the booking process (e.g., on the page that lists the hotel’s various room types). It also has to appear on the final booking page. • If a hotel provides all of the required information to its CRSs and OTAs, and if the CRSs/OTAs fail to disclose it to consumers, the FTC will be unlikely to take the position that the hotel itself is at fault. However, if a guest makes a reservation via a CRS or OTA that does not disclose to the guest the fee/surcharge information provided by the hotel, it will be “helpful” if the hotel informs such guests of all fees/surcharges at the time the guest checks in. The FTC has prepared a suggested format for providing this information on web sites. (This template is based on a two-night stay at the hypothetical hotel.) It should also be noted that the proscriptions discussed in this article would also apply to such charges as the California Tourism Marketing Act assessment and to other similar levies that the law imposes on innkeepers, such as the San Francisco Health Security Ordinance, if the innkeeper decides to pass these amounts onto their guests.  For more information on the topic of hotel rates, pricing policies and procedures, and related issues generally, see Section 11.9 of California Lodging Law, which is published by the California Hotel & Lodging Association and is available to members only via www.calodging.com. Members who have questions on this issue are welcome to contact CH&LA’s Member Legal Advisor, for free, at jim@calodging.com. HOTEL FEES AND CHARGES   Suggested website format for providing all mandatory surcharges, fees, or other amounts that are not contained in the basic room rate by the Federal Trade Commission.


CHLA Spring 2014
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