Deceptive hotel resort fees are cropping up in Washington, DC
Washington, DC, has seen a 450 percent increase in the number of hotels that charge deceptive hotel resort fees in just one year. Marriott Hotels, headquartered right in the DC suburbs, has been accused by the Attorney General of Washington, DC, of not cooperating with its investigation into the hotel’s practice of resort fees. Forty-six attorneys general from throughout the country joined the suit. So…why does DC allow deceptive hotel resort fees?
DC has an excellent opportunity to address scam hotel resort fees head-on when it considers home sharing legislation this year. We have seen time and time again that hotel scams like resort fees drive DC tourists to home shares. If the city wants to regulate home shares in DC, they need to make sure to address the scams that drive visitors to them. Hotels and home shares should have one advertised price and their one advertised price should be taxed the same. This is not rocket science, but the hotel lobby is sure not into advocating for an equal playing field.
These are the hotels in Washington, DC, that lie about their prices to customers. They charge deceptive hotel resort fees.
Mason & Rook Hotel
Liaison Capitol Hill
The Embassy Row Hotel
Washington Court Hotel
One year ago, in the summer of 2016, how many hotels were charging scam hotel resort fees in DC?
Only two hotels.
So what is the increase in the number of hotels charging scam hotel resort fees from just 2016 to 2017?
There has been a 450 percent increase in DC hotels that advertise misleading and deceptive prices in just one year.
Does this create any taxing issues in Washington, DC?
There could be complications at any time. Hotels in DC argue that the resort fee/facility fee/amenity fee is an exchange of service. This is a lie. The fee is charged whether the customer used the services or not. It is simply a mandatory charge that should be included in the room rate.
If a resort fee actually was an exchange of service, it would be taxed as a service at the sales tax rate. Hotel resort fees in DC, unlike hotels in New York City, are not taxed at the sales tax rate. Hotel resort fees in DC are currently being taxed a hotel occupancy rate — so, legally, they should be advertised as room rates. Hotels are claiming that the resort fee provides a service. In reality, these resort fees are a mandatory increase in the advertised room rate that should be taxed as a second hotel room rate.
These 11 hotels in DC are cheating the potential customers of the hotel by blatantly lying about their advertised price. The issue in DC is simply a fall advertising campaign by hotels charging the deceptive hotel resort fees. It is not a taxation issue at the moment.
There is nothing stopping DC hotels from switching from paying occupancy taxes on the room rates and a sales tax rate on the resort fees. That is what the hotels are telling consumers they are charging them for — a service. If hotels switched to paying taxes on the resort fees as a service, every hotel in DC with resort fees would end up cheating the city of tax revenue every single day. Currently, New York City loses over 8 million dollars a year in tax revenue because of the hotels’ ability to cheat on occupancy taxes when charging hotel resort fees.
What should be done?
Deceptive hotel resort fees should be banned in Washington, DC. By doing so, the city would ensure that all of the great hotels that DC has to offer are advertised fairly, taxed appropriately, and are not driving tourists to home shares. The District should work to attract as many tourists as possible to spend their money throughout the city and at DC hotels. However, tourists simply will not do that if they feel they are being misled by the hotels. Simply, the city should not allow these kinds of hotel scams.