The Marriott International Hotels brand is in the spotlight following a lawsuit filed by District of Columbia Attorney General Karl Racine earlier this month for hiding the true price of hotel rooms from consumers and for charging hidden resort fees to increase profits.
According to the lawsuit, the practice has harmed consumers, and the AG is seeking a ruling that would force Marriott to advertise the true price for its rooms upfront, and also provide monetary relief to DC consumers who have been harmed by this policy.
Racine stated in the lawsuit:
“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 is going after drip pricing—bait-and-switch advertising,” John S. Foster, Esq., attorney and counselor at law with Atlanta-based firm Foster, Jensen & Gulley, said in an interview with Prevue. “It’s more of a consumer fraud case. Hotels advertise to sell a room at one price, and people sometimes don’t realize there is more mandatory pricing until they are standing at the desk checking in or out. Marriott is maintaining that consumers have the right to walk away, but if someone has already arrived at a destination, they are not likely to turn around and walk.”
Mandatory fees are also an attempt to charge consumers for items they may not want, according to Foster. He noted the common practice of advertising a room for $200 but adding a mandatory resort fee of $30. The fees will often include extras such as free phone calls, a free newspaper, and use of the health club.
“That package is worthless to me,” Foster said. “I don’t have time for health clubs. I don’t need free phone calls, and I get the newspaper on my phone, too. “
The fees can be masked as 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. Consumers only find out about these fees after they begin to book a room, whether booked on Marriott’s site, via online travel agencies (OTAs), such as Priceline or Expedia, or other third-party sites including Booking.com.
Added to that, the lawsuit alleges that Marriott is misrepresenting resort fees as being imposed by the government by lumping the two together at the end of a booking transaction under the heading “Taxes and Fees.
The lawsuit also points out that misleading consumers about what resort fees actually pay for, saying that 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.
“Hotels started this about 10 or 15 years ago, and I’ve been fighting it in group contracts,” Foster said. “I have fought to make the fees optional–say what you get for the resort fee and either accept or not, or pay for one item a la carte,” Foster said.
Foster continued, “I was surprised it took so long for the Attorney General of DC to file something against them. They sent warning letters, which were ignored because hotels generate a lot of money from this practice.”
Foster believes the lawsuit has a high likelihood of prevailing and that Marriott will likely enter into a settlement agreement instead of spending millions going to trial. “They will sit down and consent; that’s what the government wants.”
Marriott is the first hotel chain targeted because it is the largest, Foster asserted, “but it won’t be the last. This action was brought in concert with other AGs around the country. It was agreed on Marriott because it’s located in that jurisdiction.”
Foster sees the lawsuit as a positive for individual consumers and the meetings industry.
“I see nothing but good things coming out of this,” Foster said. “For groups, they would have to disclose the event and facility fees in the contract. Hotels may become more transparent. A la carte may be more expensive, but in my mind, that’s better.”