Travelers urges FTC to taken action on drip pricing in Hotel Industry
August 27, 2012- Advocates for both corporate and individual travelers have asked the Federal Trade Commission in the U.S. to address the practice known as drip pricing that is widespread in the hotel industry. The advocates have called on the regulatory agency to end the scheme that harms business travelers, individual travelers, travel buyers and travel agencies.
The term drip pricing refers to a scheme of deception where a supplier of rooms takes out a specific portion of the true price of the room; labels portion as a mandatory charge or fee; deducts that from the real price; and then features the reduced remaining price as the true price.
Typically, the carve-outs include housekeeping, resort, and internet fees. However, there often times are other type of fees as well. The fees are not shown or told to buyers until they have already reached the resort or hotel.
The practice is obviously deception and the Department of Transportation in the U.S. quickly stopped the same practice after a number of airlines had adopted it and started to carve out fuel surcharges from their basic base fares.
Those against the practice do not want to impede the normal course of business in the travel marketplace, however they want the same marketplace more honest and transparent for everyone including buyers and sellers.