WASHINGTON, D.C. – Attorney General Karl A. Racine today filed a lawsuit against Marriott International, Inc., a multinational hotel company, for hiding the true price of hotel rooms from consumers and charging hidden resort fees to increase profits. The Office of the Attorney General (OAG) alleges that Marriott’s deceptive and misleading pricing practices and failure to disclose fees harmed consumers and violated the District’s consumer protection laws. OAG’s lawsuit seeks to force Marriott to advertise the true prices of its hotel rooms up-front, provide monetary relief to tens of thousands of harmed District consumers, and pay civil penalties.
“Marriott reaped hundreds of millions of dollars in profit by deceiving consumers about the true price of its hotel rooms,” said AG Racine. “Bait-and-switch advertising and deceptive pricing practices are illegal. With this lawsuit, we are seeking monetary relief for tens of thousands of District consumers who paid hidden resort fees and to force Marriott to be fully transparent about their prices so consumers can make informed decisions when booking hotel rooms.”
Marriott International, Inc., is a Delaware corporation headquartered in Bethesda, Md., and it is one of the largest hotel companies in the world. Marriott owns, manages, and franchises more than 5,700 hotels and 1.1 million hotel rooms in over 110 countries, including at least 29 hotels in the District of Columbia. Marriott offers hotel rooms through its own websites and through other hotel-booking websites like Priceline and Expedia.
As consumers have increasingly turned to hotel-booking sites to comparison shop across brands, the hotel industry has become highly price-competitive. To lure consumers, some hotels advertise daily room rates that are lower than the true total price consumers will have to pay for a room. Then, when consumers book the room, the hotels add mandatory fees, often called “resort fees,” “amenity fees,” or “destination fees” on top of advertised rates. By charging these fees, hotels can increase profits without appearing to raise prices. Over the past decade, Marriott has increased its use of resort fees and reaped hundreds of millions of dollars in additional profits.
In November 2012, the Federal Trade Commission (FTC) warned 22 hotels, including Marriott, that their pricing practices around resort fees may violate federal consumer protection laws by misrepresenting the true price of hotel rooms. In 2017, the FTC’s Bureau of Economics issued a report concluding that “separating mandatory resort fees from posted room rates without first disclosing the total price is likely to harm consumers.”
Marriott has charged resort fees to tens of thousands of District consumers over the years, totaling millions of dollars. OAG alleges that over the past decade, Marriott has violated the District’s Consumer Protection Procedures Act and harmed District consumers by:
- Hiding the true price of hotel rooms: Marriott conceals the true total price of hotel rooms by advertising one rate, then charging mandatory “resort fees,” “amenity fees,” or “destination fees” on top of the advertised price. At least 189 Marriott properties worldwide charge these hidden fees, which range from $9 to as much as $95 per room per day, and consumers only find out about these fees after they begin to book a room.
- Failing to clearly disclose all booking fees: The room prices Marriott lists on its own website and on third-party hotel-booking sites do not include mandatory resort fees and these fees are not disclosed up front. Consumers do not learn the total price of their hotel rooms until they begin the booking process, and resort fee disclosures are often hidden in obscure areas, confusingly worded, or presented in smaller print than the advertised rates. This leads consumers to believe they will be paying less for a hotel room than the true total cost. It also makes it extremely difficult for consumers to gather all the information they need to compare prices and make informed choices.
- Misrepresenting that resort fees are imposed by the government: In many instances, Marriott includes resort fees near the end of a hotel-booking transaction under the heading “Taxes and Fees.” By combining the amounts that consumers were asked to pay for resort fees with their tax payments under a generic heading, Marriott leads consumers to believe the resort fees were government-imposed charges, rather than additional daily charges paid to Marriott.
- Misleading consumers about what resort fees actually pay for: In some instances, Marriott makes confusing or contradictory representations about why they are charging resort fees and what services or amenities consumers are actually paying for.
The complaint is available at: https://oag.dc.gov/sites/default/files/2019-07/Marriott-Complaint.pdf
This lawsuit follows an investigation into the hotel industry’s pricing practices by the Attorneys General in all 50 states and the District of Columbia. OAG is seeking a court order to force Marriott to advertise the true prices of its hotel rooms up front, pay restitution to District consumers who paid deceptive resort fees, and pay civil penalties for violating the District’s consumer protection laws.
How to Report Unfair Business Practices
To report scams, fraud, or unfair business practices, you can submit a consumer complaint to OAG by calling (202) 442-9828 or online at oag.dc.gov.