A LAWSUIT FILED against Marriott International by the District of Columbia is the first result of a multi-state investigation into “drip pricing,” the practice of charging hidden fees when making hotel reservations. Marriott may be only the first large hotel company to face legal action over the practice.
In a press call on July 9, D.C. Attorney General Karl Racine said his office’s investigation shows that for at least a decade Marriott has charged obscure “resort fees,” “amenity fees” or “destination fees” that consumers do not see reflected in the price of a room until they are already booking it.
“One key effect of this price deception is that consumers shopping for a hotel room on either Marriott’s website or an online travel agency site, such as Priceline or Expedia, are misled into believing a Marriott hotel room is cheaper than it actually is,” Racine said. “Marriott’s motivation in continuing this deceptive practice is pure profit. Indeed, Marriott has reaped hundreds of millions of dollars over the last decade from this deceptive drip pricing.”
The attorneys general from 46 states and D.C. launched the national investigation into the fees in 2016, inspired by a 2012 warning letter on the fees by the Federal Trade Commission, according to Thompson Reuters Westlaw.com. Today the investigation includes all 50 states, Racine said, and he is filing the suit under D.C.’s Consumer Protection Procedures Act, which prohibits unfair and deceptive trade practices.
Racine said his investigation showed that Marriott had increased its use of the fees since the FTC’s warning that they may violate consumer laws, and at least 189 of Marriott’s 5,700 hotels worldwide charge resort fees ranging from $9 to $95 per room per day.
“Consumers only find out about these additional charges after they start booking a room online,” Racine said. “Even then, the resort fee disclosures are often hidden in obscure areas, confusingly worded, or presented in small print instead of being added to the advertised room rates. Incredibly, our investigation confirmed that even Marriott’s top executives agree the company’s disclosures are confusing.”
A Marriott spokesperson said the company does not comment on pending litigation, but it “looks forward to “continuing our discussions with other state AGs.”
Racine said the fees allow Marriott to increase profits without appearing to raise rates or implying that the fees are imposed by the government.
“Companies have a responsibility to disclose to consumers up-front exactly how much they are paying and what they are paying for, so that consumers can make informed purchasing decisions,” Racine said. “With this lawsuit, we hope to change the way Marriott does its business. We also are raising awareness in the hotel industry at-large that these deceptive practices are illegal, and that companies will be held accountable if they mislead D.C. consumers.”
Last week the United Kingdom’s Information Commissioner’s Office announced it plans to fine Marriott £99,200,396, or just over $123 million, in connection with a massive breach of the company’s guest reservation database last year. Marriott President and CEO Arne Sorenson said the company is disappointed in the ICO’s decision and it will fight to defend its position.