If you want to visit the Great Wolf Lodge in Manteca, there鈥檚 the price you鈥檒l see when you first search for a room 鈥� and then there are add-ons and fees you鈥檒l discover as you click through the booking process.
When Leslie Harvey took her kids to the hotel and water park last November, she paid a 鈥渞esort fee鈥� of $39.99 per day on top of the rate for the room. That fee 诲辞别蝉苍鈥檛 cover water park passes, which are included in the cost of the room, according to the Great Wolf Lodge鈥檚 website; it covers 鈥渁menities鈥� including life jackets, towels, Wi-Fi, and the coffee makers and mini fridges in rooms.
The fee 鈥減rovides for amenities and services that enhance the guest experience, and are very much in line with guests鈥� expectations when visiting a family resort destination,鈥� wrote Jason Lasecki, vice president of corporate communications for Great Wolf Resorts. 鈥淕reat Wolf Lodge fully discloses room rates and any fees to our guests throughout the booking process鈥� and in the final estimate before customers complete their reservations,鈥� and it requires third parties to inform customers about mandatory fees. When CalMatters went through the booking process for the Great Wolf Lodge in Manteca, the resort fee only became apparent after selecting dates, choosing a room, making a decision about late check out, and clicking through options to add activities and dining credits.
The fee didn鈥檛 take Harvey, who lives in the Bay Area, by surprise. She鈥檚 savvier than most 鈥� she鈥檚 been writing about travel on her blog, Trips with Tykes, for more than a decade. But, she said, she hears often from friends and readers who start planning their vacation, searching online, talking with their family about it, and 鈥渢hen they actually go through the booking screen, and they鈥檙e like, 鈥極h, gosh, this is going to be 20% more than we were budgeting.鈥欌��
Resort fees are increasing, Harvey said, and she鈥檚 now seeing fees at hotels that don鈥檛 have many amenities, including city hotels that are adding 鈥渦rban destination fees.鈥�
鈥淭hey don鈥檛 do enough to justify that fee鈥� I think it鈥檚 a ripoff.鈥�BRIAN TEETER, SACRAMENTO KINGS FAN
It鈥檚 not just hotels. Fees and surcharges pop up at the end of all sorts of purchases. When a federal government agency to crack down on 鈥渏unk fees,鈥� Californians wrote in complaining about everything from to a $5,000 鈥溾�� charge tacked on to a car purchase.
Figuring out the full price of a rental car or hotel can feel like a journey with unexpected twists and turns. A group of California state lawmakers have proposed a raft of bills that would require companies in several industries 鈥� including live events and apartment rentals 鈥� to be more transparent about total prices. Research mostly shows that people spend more when fees are tacked on to the end of a purchase compared with when all inclusive prices are listed up front.
When Brian Teeter bought tickets for the April 15 NBA playoff game between the Sacramento Kings and Golden State Warriors on Ticketmaster, each $749 ticket came with a $172 service fee. The tickets were expensive in part because it was the first time since 2006 that the Kings made it to the playoffs. Teeter, Sacramento resident and Kings fan, said he鈥檚 bought sports tickets before on other platforms, but he didn鈥檛 remember the fees being 鈥渢hat outrageous,鈥� he said. 鈥淭hey don鈥檛 do enough to justify that fee,鈥� he said. 鈥淚 think it鈥檚 a ripoff.鈥� He wishes the total price was clear on the front end, he said. Once you get far enough into the booking process to see the fees, most people, he said, are already committed to going.
Last-minute fees lead to splurging
When economist Stephen Tadelis worked for eBay in the early 2010s, executives were talking about switching ticket sales on Stubhub, a ticketing platform owned by the company, from a strategy known as 鈥渄rip pricing,鈥� where taxes and fees were revealed later, to displaying an all-inclusive price, Tadelis said in an interview with CalMatters. Executives hoped that the switch, which was made in 2014, would make customers more loyal and help Stubhub gain market share, Tadelis said. That鈥檚 not what happened. 鈥淭urns out that customers were not flocking to Stubhub鈥� because it had all-inclusive pricing, said Tadelis, currently a professor at UC Berkeley.
Before executives switched back in 2015, Tadelis and some colleagues got permission to run an experiment, revealing fees at checkout for half of Stubhub customers while maintaining all-in pricing for the rest. They customers who only saw the fees at final purchase wound up spending 21% more, and were 14% more likely to make a purchase than customers who saw the total price up front.
Other studies have found similar results. For a , economists at UC Berkeley and the Federal Reserve Board added, in one supermarket, price tags to deodorants, hair accessories, and cosmetics that included the price after the 7.4% sales tax was applied. They found that sales of those items fell by about 8% compared to two control groups of products. In a , researchers at Hong Kong University and UC Berkeley auctioned off CDs and Xbox games. They found that when a product was offered at an opening bid of one cent with a shipping cost of $3.99, it attracted more bidders and brought in more revenue compared to when they set the opening bid at $4 and the shipping fee at $0.
But not every study has the same finding. For example, , researchers at German universities manipulated how a three euro surcharge for 3D movies was presented online to customers of a large German multiplex cinema. For some customers, the fee was incorporated into the ticket price; others saw a note about a fee, but didn鈥檛 see the amount until later. They found that customers with the note were more likely to put a ticket in their online cart, but they also dropped out more often once the total price was revealed.
In general, though, the finding that people spend less when they鈥檙e presented with an all-inclusive price is 鈥渧ery consistent,鈥� Tadelis wrote in an email.
The fees can pad out businesses鈥� bottom line. When Marriott was sued over its alleged 鈥渄eceptive pricing tactics,鈥� unsealed court documents that the hotel company had brought in more than $220 million from resort fees between 2012 and 2019.
Lawmakers in DC, CA fight fees
After years of proliferating fees, we may have entered the backlash. President Joe Biden has called on and to focus on the issue and discussed it in his State of the Union address. The Federal Trade Commission is exploring regulations that would ; and Congress is considering bills on the subject.
Efforts by California lawmakers include:
- aimed at the ticketing industry which, among other provisions, would require ticket sellers to disclose the total cost before the event is selected for purchase;
- aimed at greater transparency in advertised rates for hotels, short-term rentals, and more;
- that would require rental car companies to only advertise rates that include mandatory taxes and fees;
- that would require landlords that advertise or provide quotes to include any mandatory fees.
- And an that would make it unlawful to advertise or display a price for a good or service that 诲辞别蝉苍鈥檛 include mandatory fees, besides taxes.
鈥淲hether it鈥檚 ticketing of concerts, sporting events, whether it鈥檚 renting a car, whether it鈥檚 booking a room or staying at an Airbnb鈥he people who lose are consumers,鈥� said Robert Herrell, executive director of Consumer Federation of California, which coordinated a handful of the bills. 鈥淎nd disproportionately the people who pay the brunt of this are low- and moderate-income consumers, and consumers and communities of color,鈥�
It鈥檚 still early in the legislative process 鈥� some of the bills haven鈥檛 yet gotten a first hearing 鈥� but groups are already lining up in opposition and support.
Consumer groups and Ticketmaster come down on different sides of the two bills aimed at the ticketing industry. Live Nation Entertainment, which owns Ticketmaster, opposes not because of the price transparency provision, but because it would 鈥渞egrettably steer more tickets to secondary markets where resellers and brokers get fans鈥� money instead of the artists and venues putting on the show,鈥� wrote Jonathan Lamy, the company鈥檚 senior vice president of public affairs and policy, in a letter opposing the bill. Artist groups, including SAG-AFTRA and 老夫子传媒 Artists Coalition, also oppose the bill.
The Consumer Federation of California, CalPIRG, and other consumer groups support that bill. The federation opposes , which is supported by LiveNation Entertainment and the same music industry groups. The consumer group says it 诲辞别蝉苍鈥檛 give consumers ownership over their tickets, giving them limited options if they need to resell their tickets, and defines 鈥渢icket sellers鈥� in a way that 鈥渇ails to get at the heart of the issue, which is the control exercised over consumers by those marketplace participants such as the monopolistic Ticketmaster/Live Nation that control the industry.鈥� Stubhub and Vivid Seats, two ticket resale companies, also oppose the bill in its current form.
The California Chamber of Commerce, which lobbies on behalf of businesses, opposes a couple of the bills, including the two requiring greater price transparency for hotels and short-term rentals. Robert Moutrie, an advocate for the group, said the Chamber didn鈥檛 take issue with requiring companies to be up front about mandatory fees that businesses themselves add. But, he said, including government-imposed taxes in the initial price could put California at a disadvantage when travelers are weighing a trip to California versus Washington or Nevada. He鈥檚 working with the bill authors, he said, and has shared proposed amendments with them.
鈥淭hey鈥檙e not going to move to all-in pricing until these bills start passing.鈥�LAUREN WOLFE, COUNSEL, TRAVELERS UNITED
Alyssa Stinson, regional government affairs manager for Expedia Group, which owns VRBO, a vacation rental site, wrote that Expedia will 鈥渨ork collaboratively鈥� with lawmakers on the bills.
Airbnb did not comment on the short-term rental bills, but a spokesperson shared that in December the company began rolling out the in countries without existing requirements. Hosts set room rates and cleaning fees and Airbnb sets the service fee, which is 鈥渦nder 14.2% of the booking subtotal鈥� for 鈥渕ost stays,鈥� according to the company鈥檚.
One of the reasons that Airbnb might have started offering all-inclusive pricing is because Airbnb 诲辞别蝉苍鈥檛 really have major competitors, said Lauren Wolfe, counsel at Travelers United, a consumer protection nonprofit. Hilton, Hyatt, and other hotel chains that compete against each other won鈥檛 decide on their own to add fees into their room prices, making them look comparatively expensive.
鈥淭hey鈥檙e not going to move to all-in pricing,鈥� she said, 鈥渦ntil these bills start passing.鈥�
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