4-star bargains still exist, but beware of fees

You can still find four-star hotel accommodations for less than $100 a night in many big U.S. cities. Opaque buying helps cut costs; fees add to costs. That’s the overall take-away from a recent report from Hotwire, the big online travel agency and Expedia’s player in the opaque buying marketplace.

The report’s focus was on cities where you could find the most four-star hotels for less than $100 a night when buying through Hotwire’s opaque system - that’s where you know the price, rating and general location but don’t find out the specific hotel until you make a nonrefundable purchase:

Cities with the most four-star deals are, in top to bottom order of number of hotels: Las Vegas, Atlanta, Dallas, Orlando, Minneapolis, St. Louis, Chicago, Detroit, Salt Lake City and Reno-Tahoe.

Cities with the greatest spread between the best published list price and the opaque price are Detroit, with a $58 spread, Dallas ($52), Chicago ($47), Atlanta ($45), Minneapolis ($39), Orlando ($37), Las Vegas ($35), St. Louis and Salt Lake City ($32), and Reno-Tahoe ($27).

In some ways, I was surprised that the spreads were as low as they were. My experience has been that opaque buying cuts the price of a four-star hotel by a lot more than $58, let alone $27.

But the numbers of four-star hotels with sub-$100 rates is seriously distorted by the fact that most hotels in Las Vegas, Orlando and Reno-Tahoe add hidden “resort” and other mandatory fees of up to $40 a day to what they post as their rates. The fees don’t distort the price differentials: You pay the same fees whether you buy at a posted or opaque rate. But the fees can easily put what looks like a $75 room over the $100 mark.

Digging into these numbers revealed an ugly truth about current hotel markets: The cancer of mandatory fees is spreading, and the Federal Trade Commission’s feeble efforts to police the marketplace are ineffectual. Although the worst offenders originally concentrated in Las Vegas and Hawaii, they’ve invaded other popular visitor centers as well. I checked the 10 cities on Hotwire’s list and a few other important destinations for mandatory fees.

Many or even most hotels add mandatory fees in Anaheim/Disneyland, Aspen, Atlantic City, Las Vegas, Myrtle Beach, Orlando/ Disney World, Reno-Tahoe and Scottsdale, Ariz. Resortfees.com also shows fees in Biloxi, Miss., plus scattered resorts in California and Texas.

On the other hand, I found no added mandatory fees in Branson; Burlington, Vt.; Gatlinburg, Tenn.; Jackson Hole, Wyo.; Mendocino, Calif.; New Orleans; or Newport Beach, Va.

One of the most galling aspects of this problem is that almost everybody who looks at the scam buys into the hotels’ phony excuses for the fees. The hotels generally put forth a laundry list of services the fees supposedly cover - Wi-Fi, a daily newspaper, a bottle of water in the room, access to gym facilities and such. Because the lists are plausible, people fall into the trap of accepting the correspondence between fees and individual services; they analyze the problem in terms of whether or not those services are worth the fees.

Early this year, the Federal Trade Commission sent a letter to the largest hotel chains advising them to inform customers of their mandatory fees. In response, most hotel chains and online agencies now post their fees somewhere on the first screen, but don’t include them in the featured price used for comparisons. The only true solution is to require that all mandatory fees be included in the initial base-rate posting. How we’ll get there, however, is anyone’s guess. Send e-mail to Ed Perkins at [email protected]