by Jonathan T. Howe, Esq. | August 01, 2017
As the Obama administration was winding down, a paper titled The Competition Initiative & Hidden Fees was issued through the National Economic Council, vehemently opposing hidden-fee procedures.

The report (found here) has strong language concerning this practice: "The competitive process depends fundamentally on advertised prices that are accurate. In many industries, businesses use so-called 'hidden fees' -- the addition of a mandatory or quasi-mandatory fee to the advertised price of a good or service, added at some point in the transaction, to effectively raise the final price -- in order to drive down the perceived price and lure consumers to make purchasing decisions based on misinformation. At their worst, such fees can be fraudulent or deceptive; at a minimum, they make prices unclear... and dull the competitive process."

Such practices are not new to planners, who have been asked to pay hidden costs for everything from energy surcharges to resort fees, as well as corkage and other costs that are not disclosed from the get-go. The hotel industry was not very happy about the NEC report, but the upshot for planners echoes advice I've been giving for years: Whenever you are discussing costs and payments in a contract, be as specific as possible about what your group will pay for and how much you expect to pay.


WHAT THE HOTEL MUST PROVIDE
If the room rate is going to be $300 a night, there should be a provision in the contract that delineates what that $300 covers. Are all resort, Internet and other fees that might be associated with the room added in? Will there be voluntary fees that the guest truly can waive? There needs to be total transparency. Wherever possible, steer clear of percentages and be dollar-specific.

We always include a clause stating "there should not be any other additional fees applied beyond what is set out in this contract, except for those imposed by government entities." In the negotiating process, the hotel can build the resort fee or other charges into the room rate. This avoids a practice I find deplorable: When a guest checks out and suddenly finds they are obligated to pay additional fees that were not disclosed when they booked the stay.


PERUSING THE BILL
As usual, good contract drafting is key and gives you leverage if the final bill shows unanticipated charges. You can simply refer to the agreement and say you're not going to pay the surprise extras. If they say the resort fee or any other guest-related fee is presumed as part of the guest's stay at the property, it behooves you to bring up your own ironclad contract and its fee clause again.

Let's put all fees in the contract up front and save everyone some headaches and ill will.


Jonathan T. Howe, Esq., is a senior partner of the Chicago and Washington, D.C., law firm of Howe & Hutton Ltd., specializing in meetings and hospitality law. Send your comments or legal questions to meetings-conventions@mcmag.com.