Marriott, Hyatt and now Hilton face legal pressure over resort fees
History swiftly repeats itself over and over when it comes to lawsuits over resort fees.
Texas Attorney General Ken Paxton sued Hilton this week over resort fees and what he claims the company “misleadingly charge consumers higher rates than initially advertised” and that “the services purportedly funded by the fees are often complimentary or included in the room rate at other non-resort locations.”
The latest lawsuit arrived shortly after Paxton similarly sued Hyatt over its resort fee practices and settled with Marriott over similar charges. Marriott now includes resort fees in the initially quoted nightly room rate on its booking platform.
“Heightened inflation and worsening economic conditions have made it an even more pressing priority to protect Americans from predatory, illegal corporate practices,” Paxton said in a prepared statement.
“Many major hotel chains, including Hilton, have been deceiving their customers for far too long. I warned these companies they would face consequences for this behavior, and Texas has delivered aggressive action to protect consumers, promote price transparency in the hotel and travel industries, and ensure that companies violating our laws are held responsible for misleading the public.”
The Texas AG goes on to allege Hilton doesn’t adequately display the added fee on a nightly rate and effectively charges guests extra fees twice: first as the fee itself and then again with taxes on the fee. It also comes amid increasing political pressure for travel companies to be more transparent with extra charges.
Texas charge ‘em
The lawsuit uses the Hilton Anatole in Dallas as a leading example of how the company is deploying drip pricing with resort fees or similar charges going by different names.
The hotel displayed a $193 nightly rate earlier this month but then added a $27.26 “Daily Mandatory Charge” that includes Wi-Fi access, gym access, a spa discount, breakfast for children and two in-room bottles of water. Keep in mind: Those with Silver status or higher in the Hilton Honors program already get free water as part of their loyalty status.
The Hilton Anatole also charged a “Texas Recovery Fee” for an unspecified amount, according to Paxton’s lawsuit. The “Daily Mandatory Charge” alone added more than 14% to the nightly room rate, which ended up being $258.46 after the charge and taxes were added up.
Had the 1,606-room hotel sold out every night for a year, the Texas AG lawsuit notes the ownership group would have made more than $16 million off the added fees.
The lawsuit also highlights the Woodlands Resort, a Curio Collection hotel outside Houston, and C. Baldwin, a Curio Collection hotel in Houston, as other examples of hotels in the state charging added fees under monikers like “Daily Resort Charge” and “Daily Mandatory Charge.”
The lawsuit also accuses the Hampton Inn & Suites San Antonio Riverwalk, the Hampton Inn & Suites Dallas Downtown and the Homewood Suites by Hilton Dallas Downtown of charging fees twice, first as a fee and then again as a tax — a practice that had the potential to make each hotel more than $100,000 apiece annually.
“While decisions about mandatory fees are made by ownership and management at a property level, these fees are always fully disclosed when booking through Hilton channels and we encourage all third-party distribution partners to disclose any fees when advertising our inventory,” a Hilton spokesperson said in a statement to TPG. “We have long been committed to ensuring that any fees charged by hotels in our system are fully disclosed and continue to review this issue closely to ensure there is consistency for consumers when viewing our rates across booking channels.”
Resort fees not going away
The much-maligned practice of charging resort fees almost certainly isn’t going away, but it’s highly likely they’ll get more transparent.
Marriott never admitted guilt in its settlement, and company leaders have always maintained the added fees were noted throughout the booking process. You’d see a blue box during the booking process noting the added fee on the Marriott reservations system. Hilton and Hyatt both make note of their added fees amid the booking process, but that’s not enough in the eyes of the Texas attorney general.
Further, the lawsuit goes on to note Hilton charged the fee and labeled it as going toward amenities that weren’t even accessible or open during the pandemic.
“Hilton relies on consumers either not noticing or becoming too fatigued in the search process to cancel the transaction,” the lawsuit states. “Despite eventually disclosing the fees, eventual disclosure does not cure the deception in the initial advertised price.”
While Marriott’s new practice of bundling resort fees into the initially quoted rate might seem like a likely industry practice, the company’s CEO earlier this month wasn’t ready to speak for his competitors.
“It is not as if those were hidden somehow. We're simply further clarifying and enhancing that transparency,” he said on the company’s first-quarter earnings call. “I will leave it to the state [attorneys general] around the rest of the country for the rest of the industry. But I am pleased that we will lead the industry in terms of the transparency of our disclosure for our guests.”
Related reading:
- The award traveler’s guide to Hilton Honors
- How to choose the best Hilton credit card for you
- What is Hilton Honors elite status worth?
- The best credit cards to reach elite status
- Which credit cards offer the most lucrative rewards for hotel stays?
- The best hotel rewards programs in the world
- Best hotel credit cards
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There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
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- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
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- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
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- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.