Hilton sued over resort fees

The lawsuit seeks to force the hotel company to “advertise the true prices of its hotel rooms up front"

The Hilton lawsuit follows an investigation into the hotel industry’s pricing practices by the attorneys general in all 50 states and the District of Columbia
The Hilton lawsuit follows an investigation into the hotel industry’s pricing practices by the attorneys general in all 50 states and the District of Columbia

Nebraska Attorney General Doug Peterson has filed a lawsuit against Hilton “for hiding the true price of hotel rooms from consumers and charging hidden resort fees to increase profits," according to Hotel Management. 

In a statement, Peterson alleges that Hilton’s pricing practices and “failure to disclose fees” both “harmed consumers and violated Nebraska’s consumer protection laws.” 

The attorney general’s lawsuit seeks to force the hotel company to “advertise the true prices of its hotel rooms up front, provide monetary relief to harmed Nebraska consumers, and pay civil penalties.”

Did you like this story?
Click here for more

Responding to a request for comment, Nigel Glennie, Hilton's VP of corporate communications, pointed out that resort fees are charged at fewer than 2% of the company's properties worldwide.

The fees, the spokesperson, said “enable additional value for our guests, and are always fully disclosed when booking through Hilton channels. We have not yet been served the related documents, so will take the opportunity to review these before providing additional comment.”

The lawsuit comes on the heels of a similar one filed two weeks ago by Washington, D.C., Attorney General Karl Racine 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.

As with the Hilton suit, the Marriott one also seeks to “permanently enjoin Defendant from advertising daily hotel room rates that do not include mandatory resort fees in the price advertised for rooms at its hotels,” have the company pay restitution to D.C. consumers and statutory civil penalties.

In November 2012, the Federal Trade Commission warned the hotel industry that its pricing practices around resort fees may violate federal consumer protection laws by misrepresenting the true price of hotel rooms. 

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.”

The Hilton lawsuit follows an investigation into the hotel industry’s pricing practices by the attorneys general in all 50 states and the District of Columbia.

For all the latest hospitality news from UAE, Gulf countries and around the world, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page.

Most Popular

Newsletter

Reports

Human Capital Report 2017

Human Capital Report 2017

The second annual Hotelier Middle East Human Capital Report is designed to explore the issues, challenges and opportunities facing hospitality professionals responsible for the hotel industry’s most important asset – its people. The report combines the results of Hotelier Middle East's HR Leaders Survey with exclusive interviews with the region's senior human resources directors.

Hotelier Middle East Housekeeping Report 2016

Hotelier Middle East Housekeeping Report 2016

The Hotelier Middle East Housekeeping Report 2016 provides essential business insight into this critical hotel function, revealing a gradual move towards the use of automated management and a commitment to sustainability, concerns over recruitment, retention and staff outsourcing, and the potential to deliver much more, if only the industry's "image problem" can be reversed.

From the edition

From the magazine