Prepared Remarks
by
Attorney General Karl A. Racine
Office of the Attorney General for the District of Columbia
Marriott Lawsuit Press Call
July 9, 2019
Good afternoon. Today, my office is filing a lawsuit against Marriott International, Inc., for charging consumers deceptive “resort fees” when booking hotel rooms, hiding the true price of hotel rooms, and misleading consumers in order to increase company profits. This is a straight-forward deception case.
For at least the last decade, Marriott has used an unlawful trade practice called “drip pricing” in advertising its hotel rooms whereby Marriott initially hides a portion of a hotel room’s rate from consumers. Marriott calls this hidden portion of the room rate a number of terms, including a “resort fee,” “amenity fee,” and a “destination fee.”
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. 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 District brings this action to require Marriott to be straight up and transparent with consumers by setting forth the true price of the hotel room, including resort fees, amenity fees, and destination fees when it first displays the price of the room.
As far back as 2012, the Federal Trade Commission warned hotel chains, including Marriott, that misrepresenting resort fees could violate consumer protection laws. But an investigation conducted by my office found that over the last decade, Marriott has actually increased its use of these hidden fees—and as a result, reaped hundreds of millions of dollars in additional profits.
Marriott is one of the largest hotel companies in the world. It owns, manages, and franchises more than 5,700 hotels in over 110 countries, including at least 30 hotels in the District of Columbia. Our investigation into the company’s pricing practices found that at least 189 Marriott properties worldwide charge resort fees that range from $9 to as much as $95 per room per day.
Consumers only find out about these additional charges after they start booking a room online. 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.
By charging resort fees and by failing to clearly disclose them to consumers up front, Marriott has found a way to increase profits without appearing to raise prices. In some cases, Marriott even leads consumers to believe that resort fees are charges imposed by the government.
In once scenario uncovered by my office, Marriott quoted consumers a rate of $219 per night per room for a hotel in Las Vegas, but did not disclose additional fees on its website or on the travel-booking site Expedia. When consumers neared the end of the booking transaction and prepared to enter credit card information to, Marriott then provided consumers a “summary of charges.”
Surprisingly, the summary of charges finally allowed consumers to identify the true cost of the room at $249 per night for the room -- $30 more dollars than Marriott originally advertised. Marriott then misleadingly labeled the additional charges per night as “taxes and fees,” omitting a full explanation about the charges. Only when they read the fine print do they learn that only $33.32 of the fees were truly government taxes and fees, while the remaining $30 were a “destination amenity fee.”
Bait-and-switch advertising and other forms of deceptive pricing are unfair and illegal. We are bringing this lawsuit against Marriott under the District’s Consumer Protection Procedures Act, which prohibits unfair and deceptive trade practices like this one. Our lawsuit follows an investigation into the hotel industry’s pricing practices by the Attorneys General in all 50 states and the District of Columbia.
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. 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 District consumers.
Thank you.