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With all of the customer service problems facing the airline industry, we can be thankful that the law requires carriers to include all mandatory taxes fees in the first price you see. But in the hotel industry, online travel agencies and rewards programs are free to hide the final price until you commit to your purchase. And in the case of hidden resort fees, you may even have to make additional payments on-site, on top of your prepaid reservations.
In today’s post, I’ll examine how transparent the hotel pricing is for the major credit card rewards programs and the largest online travel agencies.
Why This Matters
Imagine a grocery store with no price labels. Would you want to shop there? Even worse would be inaccurate labels that only show a portion of the price you must pay. And if you only found out the final price upon checkout, that would be a major inconvenience, and you probably wouldn’t shop there again.
But that’s essentially what many credit card rewards programs and online travel agencies do by omitting various taxes and fees from their hotel prices. At least with groceries, you know that they’re all subject to the same local sales taxes. But with hotels, the taxes and fees can differ based on their location. Also, many properties may be passing their own taxes onto guests as “tax recovery” charges, rather than including them as part of the rate.
And that’s before we even get to the dreaded resort fees, which are becoming ridiculous. When you book a hotel room through a rewards program or an online travel agency, you often have no idea if you will be charged a resort fee, and if so, how much.
Most online travel agencies and rewards programs are burying information about mandatory resort fees and surcharges in vaguely worded statements that include optional fees like those for parking and room service. Short of calling the property and hoping to get a straight answer, the only way to find out if a hotel will impose other mandatory fees is to do a tremendous amount of sleuthing on the website, which may not even list its fee. And of course, all of this effort completely destroys the benefits of using a travel agency in the first place.
The Transparency of Major Credit Card Rewards Programs
American Express Membership Rewards: Not Transparent
To be clear, booking a hotel room is not the best use of Amex Membership Rewards points. According to TPG’s latest valuations, these points are worth 2 cents each, yet you only receive 0.7 cent per point in value toward hotel bookings made through Amex Travel.
On the other hand, the Platinum Card from American Express now offers 5x Membership Rewards points for hotels booked on Amextravel.com, so this can be a great place to make paid reservations.
As you can see, Amex’s website shows that the The Westin New York at Times Square can be booked for $264 or 37,714 Membership Rewards points. Or can it?
The next screen seems to confirm this rate, even giving you the option to “Book.”
But surprise: The rate jumps up to 43,779 points or $306.45, with no previously mentioned possibility of additional taxes and fees.
But wait, there’s more. You may also be charged additional taxes and fees by the hotel upon checkout. How much can you be charged? You won’t know until you do extensive research for each hotel.
Chase Ultimate Rewards: Not Transparent
I really like Chase’s Ultimate Rewards travel center, especially when I can get 1.5 cents in value with points from my Sapphire Reserve card. I also love that I can use my Ultimate Rewards points for a variety of flights, hotels, cars and activities.
But sadly, hotel pricing isn’t straightforward here, either. First, you’ll see a price that doesn’t include any mention of mandatory taxes and fees. It’s only after you select a hotel room and proceed to checkout that the actual rate is revealed. And in major metropolitan areas with high tax rates, the difference can be remarkable.
For example, the initial search results showed the Residence Inn by Marriott Los Angeles LAX/Century Boulevard for $264.82 or 17,655 points per night, and there was no mention of additional taxes and fees.
Next, you are asked to select a room, and the price remains the same. However, this screen does indicate that some taxes and fees are not included.
But it’s only when you finally click on “Book” that you see the actual price you must pay:
As you can see, the actual price jumps from 52,963 to 61,315, and increase of over 15%.
But that’s not all. The next screen references “Other Local Taxes and Resort Fees may be collected directly by the hotel.” What this means is that the property may bill you at checkout for additional taxes and fees, including the infamous “resort fee.”
Citi ThankYou Points: Partially Transparent
I checked the Bellagio Hotel in Las Vegas, and found this price of $191.97 or 15,357 ThankYou points.
And, to my delight, the price remained the same all the way through checkout. However, no mention is made of Bellagio’s $39-per-night resort fee. In fact, even the Bellagio’s website fails to specify this fee, until you go through the process of booking a room.
Online Travel Agencies
Expedia Group Sites: Mostly Transparent
Expedia owns and operates many online travel agencies including Hotels.com, Hotwire.com, Orbitz and Travelocity. The results below are the same on any of these sites.
I again looked at the Bellagio hotel to see how transparent Expedia group sites are.
The initial search showed a room for $150 per night, but that turned out to be a far cry from what you would eventually have to pay.
However, the second screen in the booking process helpfully mentioned that the initial $150 price excluded a $44.22 daily resort fee. I have no idea why it differs from the $39 fee listed for reservations made on Bellagio’s site, but at least it’s disclosed.
It’s unfortunate that Expedia fails to include its own service fees in the initial price you see, let alone taxes and mandatory resort fees. Nevertheless, you at least know what the total price will be, which is much more than other travel agencies and credit card rewards programs offer.
Priceline Group: Mostly Transparent
As with Expedia, the Priceline Group includes several other online travel agency brands such as Booking.com and Kayak (which is more of a meta-search site than an online travel agency). Priceline and Booking.com have about the same level of transparency as Expedia group sites.
The initial price showed by Priceline is devoid of taxes and mandatory fees.
But at least the second screen includes the “daily hotel fee,” although it’s unclear why it’s even higher than the one charged by Bellagio or the Expedia group sites.
But at least customers are shown the final price before checkout, making it mostly transparent.
Hotel Tonight: Not Transparent
When booking a hotel through this mobile app, the taxes and fees are not disclosed until the end of the transaction, and there’s no disclosure at all of mandatory resort fees.
Rocketmiles: Not Transparent
Rocketmiles offers to give you points or miles with your favorite program when you book a hotel through its service. However, it fails to mention taxes and fees in its initial search page, but then discloses them once you select a particular room. Yet it still fails to offer any disclosure of other mandatory fees imposed by hotels upon checkout, other than a brief mention that only appears when mousing over “info.”
Finally, I found that Rocketmiles frequently shows an offer for a certain amount of points, only to later reduce that offer after you select your hotel.
The online travel agencies that fall under the Expedia and Priceline umbrellas were the most transparent in my testing, but even those were far from ideal. Travelers would greatly benefit from seeing the final prices on the first page of results, including all mandatory taxes and surcharges.
I don’t think most guests care how much of their bill goes to taxes or whatever arbitrary benefits hotels claim to include as part of a mandatory “resort fee.” We only care about the final price, and travel sites should be making this easier to determine, not harder.
Of the three major rewards programs, Citi’s ThankYou Rewards was significantly more transparent. By including taxes in the first screen, it makes the experience more straightforward than Chase or American Express. However, all three should still include other mandatory charges in the first price you see.
The bottom line is that whether you use points or an online travel agency to book your stay, it’s extremely difficult to figure out how much a hotel room will ultimately cost you. When vital pricing information is withheld during a transaction, customers are deprived of the information necessary to make the right choice. Online travel agencies and resort programs would be wise to realize that consumers will blame them as much as the hotel when they eventually realize that they’ve been deceived.
In your experience, which booking site offers the most transparent hotel pricing?
Featured image courtesy of Eric Lo via Getty Images.
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