D.C. AG sues Marriott for ‘misleading’ resort fees

Washington, D.C. Attorney General Karl Racine has filed a lawsuit against Marriott International that claims the company violates consumer protection laws by adding hidden fees. The suit alleges that advertising one price then lumping mandatory fees in with taxes later in the booking process illegally misleads consumers.

The D.C. attorney general has been leading an investigation into Marriott’s practices since June 2016. This lawsuit follows that investigation, which involved attorneys general from all 50 states.

The suit asks the court to enjoin Marriott from continuing its practice of advertising daily rates that do not include mandatory resort fees. Additionally, it asks for it to pay restitution for amounts collected from D.C. consumers, to pay statutory civil penalties in an amount to be determined at the trial and to cover the District’s costs and attorney’s fees for its investigation and its lawsuit.

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In his prepared remarks, Racine said it’s a company’s responsibility to disclose the exact amount consumers will pay so that they can make informed purchasing decisions. “With this lawsuit, we hope to change the way Marriott does its business,” he said. “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 District consumers.”

Racine said his office’s investigation found 189 Marriott properties worldwide that charge resort fees ranging from $9 to $95 per room per day. Of the company’s more than 5,700 hotels worldwide, approximately 30 are located in D.C. The lawsuit did not clarify how many D.C. hotels charge mandatory fees, but it did claim the company had charged resort fees to tens of thousands of D.C. consumers over the years for a total of more than $1 million.

In 2015, the Federal Trade Commission decided that, unlike airlines and travel agents, hotels are not required to include incremental fees in their advertised rates. However, the D.C. suit highlights a 2017 report from the FTC’s Bureau of Economics that said “the literature suggests that separating mandatory resort fees from posted room rates without first disclosing the total price is likely to harm consumers by artificially increasing the search costs and the cognitive costs of finding and booking hotel accommodations.”

Marriott chose not to comment on the lawsuit, but said it looks forward to discussions with other state AGs.

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