One of the most annoying trends in the hotel industry is resort fees, destination fees, facility fees… whatever you’d like to call them. Essentially these are added mandatory charges that hotels tack on to the room rate.
Why hotels charge resort fees
Hotels charge these fees for a variety of reasons:
- They’re a way for hotels to try and get more revenue without increasing the “transparent” room rate
- It works out better for the hotel than an increase in the room rate, since historically they don’t have to pay travel agents a commission on these fees
- In some areas it also allows hotels to skirt the typical occupancy tax that otherwise applies on the room rate
Hotels are largely delusional about these fees, and the Hotel Association of New York has stated that guest “appreciate the value offered” by these fees.
While I’m not generally for the government getting involved in everything, I’ve long said that I think it would benefit consumers for the government to at least require hotels to be forced to advertise all-in pricing, just as they require of airlines. I’m not saying hotels shouldn’t be allowed to charge these fees, but rather that they have to be clearly disclosed.
Well, it looks like we may finally see some progress on this front.
Attorney General files lawsuit over resort fees
District of Columbia Attorney General Karl Racine has today filed a lawsuit against Marriott for hiding the true price of hotel rooms from consumers and for charging hidden resort fees to increase profits.
He argues that this practice has harmed consumers, and he wants to force Marriott to advertise the true price for their hotels up-front, and also to provide monetary relief to DC consumers who have been harmed by this policy.
Attorney General Racine had the following to say:
“Marriott reaped hundreds of millions of dollars in profit by deceiving consumers about the true price of its hotel rooms. Bait-and-switch advertising and deceptive pricing practices are illegal. With this lawsuit, we are seeking monetary relief for tens of thousands of District consumers who paid hidden resort fees and to force Marriott to be fully transparent about their prices so consumers can make informed decisions when booking hotel rooms.”
The lawsuit notes that many people book hotels through comparison sites, so to lure customers, some hotels advertise daily rates that are lower than the true total price consumers will have to pay for a room. Then when consumers book, the hotel adds mandatory fees.
The lawsuit alleges that consumers have been harmed in the following ways:
- Hiding the true price of hotel rooms: Marriott conceals the true total price of hotel rooms by advertising one rate, then charging mandatory “resort fees,” “amenity fees,” or “destination fees” on top of the advertised price. At least 189 Marriott properties worldwide charge these hidden fees, which range from $9 to as much as $95 per room per day, and consumers only find out about these fees after they begin to book a room.
- Failing to clearly disclose all booking fees: The room prices Marriott lists on its own website and on third-party hotel-booking sites do not include mandatory resort fees and these fees are not disclosed up front. Consumers do not learn the total price of their hotel rooms until they begin the booking process, and resort fee disclosures are often hidden in obscure areas, confusingly worded, or presented in smaller print than the advertised rates. This leads consumers to believe they will be paying less for a hotel room than the true total cost. It also makes it extremely difficult for consumers to gather all the information they need to compare prices and make informed choices.
- Misrepresenting that resort fees are imposed by the government: In many instances, Marriott includes resort fees near the end of a hotel-booking transaction under the heading “Taxes and Fees.” By combining the amounts that consumers were asked to pay for resort fees with their tax payments under a generic heading, Marriott leads consumers to believe the resort fees were government-imposed charges, rather than additional daily charges paid to Marriott.
- Misleading consumers about what resort fees actually pay for: In some instances, Marriott makes confusing or contradictory representations about why they are charging resort fees and what services or amenities consumers are actually paying for.
This is a rough day for Marriott, between the fine they’re getting for their data breach, and now this lawsuit. I’m not sure why exactly Marriott is being targeted here over other hotel groups, because this is something many major hotel groups are guilty of.
However, I’m thrilled to see the government finally take on resort fees. Like I said, this isn’t about forcing hotels not to charge these fees, but rather is about forcing hotels to accurately advertise prices from the beginning of the booking process.
Here’s to hoping that other parts of the country beyond DC file similar suits…
(Tip of the hat to @JamesScott2, bo jangles, and many more)