OAG Lawsuit Against Marriott for Resort Fees Could Affect Traveling Teams
24 Jul, 2019By: Mary Helen Sprecher
With its lawsuit against Marriott for resort fees, the Washington, D.C. Office of the Attorney General is proving that what you don’t see is more dangerous than what you do – at least from a cost/benefit standpoint. The question, of course, is this: What do planners need to know about the court action – and the fees themselves?
The lawsuit, filed by OAG Karl Racine just after the busy July 4th weekend, cites the hotel chain for hiding the true price of guest rooms from consumers and charging hidden resort fees to increase profits. The OAG allegation states that “Marriott’s deceptive and misleading pricing practices and failure to disclose fees harmed consumers and violated the District’s consumer protection laws. OAG’s lawsuit seeks to force Marriott to advertise the true prices of its hotel rooms up-front, provide monetary relief to tens of thousands of harmed District consumers, and pay civil penalties.”
The lawsuit in D.C. follows an investigation into the hotel industry’s pricing practices by the Attorneys General in all 50 states.
“To lure consumers, Marriott advertised daily room rates lower than the true total price for a room,” Racine stated in a Twitter thread. “Then, during booking, mandatory fees were added on top of advertised rates, which allowed Marriott to increase profits without appearing to raise prices.”
Racine explained that Marriott’s resort fees ranged from $9 to as much as $95 per room per day. “Discovering these charges only after a consumer has started to book a room makes it extremely difficult to compare prices and make informed choices,” he noted. “In some instances, Marriott led consumers to believe the resort fees were government-imposed charges, rather than additional daily charges paid to Marriott. This kind of bait-and-switch advertising and other forms of deceptive pricing are unfair and illegal.”
The Office of the Attorney General (whose full documentation is available here) is seeking a court order in order to force the multinational hotel brand to advertise the true prices of its hotel rooms up front; pay monetary relief for DC consumers who were charged deceptive resort fees; and pay civil penalties for violating DC’s consumer protection laws.
Consumer Reports notes that the so-called hidden fees are becoming worse, and have been the source of hundreds of complaints to the magazine. In fact, the article states, the hotel industry raked in a record $2.9 billion in resort fees and other fees and surcharges in 2018, with even more expected for 2019, according to Bjorn Hanson, Ph.D., a hotel consultant and clinical adjunct professor at the Jonathan M. Tisch Center of Hospitality at New York University.
It isn’t the first time the issue of resort fees has been in the legal spotlight – it’s far from the first time people have complained about them. The travel blog, The Points Guy, notes, “Resort fees have long been a bane of existence for travelers. After many years of seeming powerlessness against the relentless increase of additional costs “hidden” in plain sight, consumers and third-party booking agencies have begun fighting back. With some hotel loyalty programs (Hilton and Hyatt, for example), using points is a way to avoid paying resort fees, though that option does not work with Marriott who charges resort fees on both paid and award bookings (occasionally even charging per person instead of per room).”
Several years ago, the FTC considered sanctioning the controversial charges, but ultimately found they were not required to be included on advertised hotel rates. This is a direct contrast to airlines and travel agents, both of which are required to disclose all incremental fees in their final advertised prices.
Planners who are negotiating with hotels should ask for a breakdown on room charges and should ascertain that individuals who are making their reservations will not encounter unexpected fees. Housing bureaus may also be able to create safeguards against individuals being hit with surcharges.
"Resort fees and other fees can be negotiated in every hotel contract, depending on the size and scope of the particular event you're negotiating," says Nicholas Collins of HBC Event Services. "It helps when you are contracting a larger block of rooms and even more so if you intend on utilizing food and beverage at the hotel. It also depends on the availability in the area, the demand at the time and how willing the hotel will be to work with you on your requests. It is very easy, for example, to receive discounted resort fees at hotels in Las Vegas for larger blocks of rooms. There are plenty of factors but negotiation is always possible."
Those who are charged resort fees in a city where they have not negotiated the housing may still have some recourse; Frommer’s includes this list of actions travelers can take that may help them get out of some or all of the surcharges.
SDM will continue to follow the developments in this lawsuit.