Resort fees are embedded into many hotels' business models, so it would take a lot to upend them. But the prospect is picking up a lot of momentum.
The pressure on hotels over their consumer-unfriendly resort fees is building as the District of Columbia sued Marriott International, alleging the chain “has reaped hundreds of millions of dollars over the last decade” by leveling these “deceptive” charges.
The complaint, filed Tuesday by the city in Superior Court (see below), alleged that Marriott is engaged in “an unlawful trade practice” and has violated the District’s Consumer Protection Procedures Act” by using what the U.S. Federal Trade Commission has labeled “drip pricing.”
Calling these resort fees — also sometimes labeled as amenity fees or destination fees — profit centers for the Bethesda, Md., hotel chain, which is the largest in the world, the lawsuit states that “Marriott owns, manages, or franchises at least 189 properties worldwide that charge consumers resort fees ranging from $9 to as much as $95 per day.”
The lawsuit states that Marriott International insists that it approve resort fees before its franchisees, which own many of its affiliated properties, are allowed to charge guests these fees.
The issue, as the lawsuit points out, is that Marriott allegedly hides these fees from consumers on Marriott’s websites and on online travel agency websites, such as Expedia and Priceline, by excluding them from the room rate or by camouflaging them in “taxes and fees” shown online or on credit card statements.
Asked to comment on the lawsuit, Marriott International spokesman Brendan McManus said, “We don’t comment on pending litigation, but we look forward to continuing our discussions with other state AGs.”
Renaissance Las Vegas Hotel
Marriott International operates 30 hotel brands such as The Ritz-Carlton, Westin, and Courtyard, and the lawsuit took its Renaissance Las Vegas to task over the way it deceptively displays resort fees.
The lawsuit notes when consumers visit a Marriott website, the Renaissance Las Vegas hotel might show a $219 nightly room rate on the first screen with no hint of a resort fee. That makes the room rate lower than it actually is. The base rate is displayed the same way on Priceline and Expedia, the lawsuit notes, depriving consumers of the ability to make apples to apples price comparisons with other properties.
When consumers click through for more details on Marriott websites, only then do they first see “an obscure box” that states, “USD 30 daily destination amenity fee added to room rate incl free play at local casino, whiskey/wine tasting, and more,” the lawsuit stated.
“This statement appeared in small typeface in a shaded light blue box and was displayed less prominently than the quoted room rate of ‘219,’ which appeared in a larger bolded typeface and still did not include the resort fee,” according to the lawsuit.
The lawsuit added: “Moreover, as Marriott’s top management admitted during an investigative interview, the statement ‘daily destination fee added to room rate’ is ambiguous and confusing to consumers because it may be understood either as indicating that the daily destination fee has already been ‘added’ to the room rate quoted on the page, or that it will be ‘added’ to the quoted rate at a later time.”
The lawsuit seeks injunctive relief to force Marriott to cease charging resort fees and to cover civil penalties and attorneys’ fees.
Hotels — and not just Marriott — have come under renewed pressure in recent weeks. Skift broke the news in late May that Booking Holdings would begin charging hotels commissions for the first time on its resort fees. The policy was to be rolled out first in the United States starting June 1, and then globally in destinations that charge such fees.
But about a week after Expedia Holdings announced it wouldn’t charge commissions on resort fees, Booking Holdings reversed course and, as Skift reported exclusively, quietly informed hotels that it would delay the commissions on resort fees until January 1, 2020. The timing of the new commissions — or the question of whether Booking Holdings, which shuffled leadership at its biggest brand, will actually impose the new charges — is fluid and subject to change.
Although Expedia declined to impose new commissions on resort fees, it noted that hotels that charge such fees will likely plummet in its search results because the fees will be taken into account in the display order.
Pressure on Resort Fees
All of this pressure on resort fees takes place seven years after the Federal Trade Commission, as noted in the lawsuit, warned the hotel industry that its resort fee practices may run counter to consumer protection laws by misrepresenting the actual cost of hotel stays.
Marriott, the lawsuit stated, received a warning letter from the commission about these so-called drip pricing practices. The Federal Trade Commission in 2017 issued a report stating that separating resort fees from room rates would “likely” harm consumers.
The lawsuit noted that its complaint “followed an investigation by the Attorneys General in all 50 states and the District of Columbia regarding the pricing practices of the hotel industry.”
Here’s the lawsuit:
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Photo credit: Marriott Baltimore Waterfront in Inner Harbor, Baltimore, Maryland. The District of Columbia sued Marriott International over its resort fee practices. m01229 / Marriott