D.C. Sues Marriott Over Hidden Resort Fees ‘Pricing Deception’

27.07.2023 - 18:04 / smartertravel.com

The first real action to prevent hotels from posting false low-ball prices on initial rate searches, also known as hidden “resort fees,” is finally underway. The Attorney General of the District of Columbia asked the D.C. Superior Court for injunctive relief against Marriott (the world’s largest hotel chain) for violations of the District’s consumer protections against deceptive advertising. And it could mean a lot for the future of hotel pricing.

Specifically, the lawsuit asks the court to require that Marriott post up-front rates, including any mandatory fees retained by hotels, in its own postings as well as data submitted to online travel agencies (OTA) such as Booking.com, Expedia, etc. The suit also calls for civil penalties, lawyers’ fees, and restitution. The current suit is limited to Marriott, with restitution limited to D.C. residents, but further action against Marriott and other hotel chains and in other jurisdictions seems likely.

This suit is in response to the growing trend of hotels (not just Marriott) splitting total room rates into two components: a false, low-ball price designed to achieve a favorable placement in rate searches, and a mandatory “resort” or other fee that hotel guests must pay separately, after they’ve chosen the low-ball price. Originally confined to resorts in a few major tourist destinations, most notably Hawaii and Nevada, the practice has spread to many vacation destinations and hotels, and lately to city hotels under names such as “facility” or “destination” fee. Although hotels cook up laundry lists of services the fees are claimed to cover, the fact that the fee is mandatory means such excuses are meaningless: If you’re required to pay it and the hotel keeps it, it’s part of the overall price.

The current suit does not hold that mandatory fees, as such, are inherently illegal; in fact, many stakeholders agree that they are not, if adequately disclosed. The crux of the issue is whether current practice—disclosure downstream in the purchase process—is adequate. The District suit claims that it is not; that the only way to avoid consumer deception is to include all mandatory fees in the original price postings that consumers use to narrow hotel searches.

The District’s position has precedent: The Department of Transportation says it’s OK for airlines to split a total fare into base fare and carrier-imposed fee categories so long as the figure presented to consumers in the original fare search includes all fees. Some airlines do this; others don’t, but either way, fare comparison searches honestly reflect what travelers will pay to fly.

Hidden fee price advertising