President Joe Biden made a big announcement during the State of the Union address, vowing a crackdown on hidden fees in the travel industry. In his speech, he outline plans to outlaw “resort fees” charged by hotels and to prohibit airlines from charging families to sit together as part of the “Junk Fee Prevention Act”.

President Biden Calls for Transparency in Mandatory Hotel Fees

Few things are as universally disdained by frequent travelers as hidden fees tacked on after a booking is initiated, as hotel resort fees usually are. President Biden is likely to draw bipartisan support when he says, “Americans are tired of being played for suckers.”

Hotel resort fees have been a key source of frustration for many travelers. These fees are tacked on to the bill for services such as WiFi and gym access, even though these amenities are often included for free at other hotels. Resort fees can cost up to $90 per night and are mandatory, not optional.

The Federal Trade Commission (FTC) has published a notice of proposed rulemaking to outlaw deceptive or unfair fees in the travel industry. FTC Chair, Lina Khan, said, “Resort fees at hotels first emerged in the late 1990s. By 2015, they accounted for one-sixth of total hotel revenue. That’s $2bn per year. With rising prices, fees are becoming more prevalent, allowing some businesses to raise effective prices without appearing to do so.”

Here’s what the Biden White House has to say on resort fees:

Ban surprise resort and destination fees. When families set their budget for a vacation, they expect that the hotel price they see is the price they will pay. But many travelers encounter surprise “resort fees” or “destination fees” when they check out or at the end of a lengthy online reservation process. These fees harm consumers by preventing them from the seeing the true price when they pick out a hotel and by limiting their ability to comparison shop. Over the past decade, a growing number of hotels have imposed these fees on consumers, which can be $50 or more per night. More than one-third of hotel guests report having paid such fees. And the total costs for Americans are enormous: according to one report, hotels collected billions in these fees and surcharges in 2018.

The President urges Congress to ban these surprise fees by requiring that hotels include them in the price of the room, so consumers aren’t surprised. Travelers should know which hotels charge these fees and which ones do not, so that they can plan and budget accordingly.

Biden: Ban Airline Seating Fees for Small Children

Another, more controversial, proposal from the president is to ban seating the fees that airlines charge for seat selection when it involves families sitting together.

While most airlines usually seat families together, it’s not guaranteed. President Biden has vowed to ban these fees, saying during his speech, “We’ll prohibit airlines from charging up to $50 roundtrip for families just to sit together. Baggage fees are bad enough – they can’t just treat your child like a piece of luggage.”

In the UK and a number of other countries, airlines are legally required to seat families with young children in close proximity. Here’s the White House’s statement on airline seating fees:

Ban airline fees for family members to sit with young children. Many airlines today charge a fee to select a seat in advance, including for those traveling with children. Parents can find themselves unexpectedly not seated with their young child on a flight or paying large fees to sit next to their children. The President believes no parent should have to pay extra to sit next to their child. 

In July 2022, the DOT issued a notice stating that it is the Department’s policy that U.S. airlines ensure that children who are age 13 or younger are seated next to an accompanying adult with no extra charge, but still no airline guarantees fee-free family seating. DOT will publish a family seating fee dashboard and launch a rulemaking to ban the practice. The President is calling upon Congress to fast-track the ban on family seating fees so that the DOT can crack down on these practices more quickly than through a rulemaking. 

Bottom line

President Joe Biden announced during the State of the Union address that his administration will crack down on hidden fees in the travel industry. The Federal Trade Commission is publishing a notice of proposed rulemaking to outlaw deceptive or unfair fees in the travel industry, including hotel resort fees and airline seating fees for families with young children. The Biden administration is pushing for these fees to be included in the main price of hotel rooms and for airlines to guarantee fee-free family seating.