Your hotel might have a secret… and your group could end up paying for it if you're not careful.
The secret takes the form of fees and other charges that suddenly appear on bills without fair warning, an occurrence that just about every planner has encountered. One such practice is under fire: In July, Karl A. Racine, the attorney general for the District of Columbia, filed a lawsuit alleging that Marriott International "has reaped hundreds of millions of dollars over the last decade" using deceptive charges, referring to resort fees in particular. The complaint alleges that the "unlawful trade practice" violated the District of Columbia's Consumer Protection Procedures Act by using what the Federal Trade Commission labels "drip pricing." The filing says the charges were hidden from consumers on Marriott websites and on the websites of online travel agencies, often appearing after the booking was made or on credit-card statements.
While the lawsuit wends its way through the courts, here are some issues planners need to be aware of for all such hidden fees.
Eyes on the Contract
Resort fees aren't the only costs that give heartburn to meeting professionals. What about "service charges," "union fees," "energy surcharges," "mandatory gratuities" and the like? In many cases these are not disclosed until the contract is being signed or in some cases much later, hiding behind language such as "plus additional charges as may be incurred at the time of performance."
It is always wise to require the disclosure of all fees and costs expected, spelled out fully in the body of the contract before it is signed. This way, when the master bill arrives with undisclosed fees, the host organization and its attendees would not be obligated to pay up.
Also look out for clauses that "incorporate by reference" a document that you haven't seen or read. The incorporation makes the document as much a part of your contract as if it were set out in full in the agreement. We have seen groups hit for thousands of dollars because they never read the other document.
Are They Taxable?
Looking at "service fees" that show up among food-and-beverage charges, planners always should ask how much goes to the servers and staff as a gratuity. You then need to know whether the jurisdiction that is home to the hotel exempts gratuities from the taxes levied on your event. If the payment is retained in full by the house, the total amount usually will be taxed.
Resort fees can be subject to occupancy taxes by the city and/or state. And if the property you are using isn't designated as a resort, that doesn't mean such fees won't appear on the bill: They can masquerade as urban fees, destination fees and the like. Such charges might be taxed, and it certainly pays to find out.
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. Email questions to him at [email protected]