Litigation proceeds against allegedly misleading resort fees

In 2019, attorneys general in Nebraska and the District of Columbia filed suit against major hotel corporations Hilton and Marriot respectively, charging them with using deceptive advertising that violated state law. These suits, involving major players in the hospitality industry, could significantly impact the industry practice of using “resort fees” to boost revenue.

What are resort fees? Why are they illegal?

Resort fees can be anything from a bottle of water to internet access to fitness room access. Understandably, consumers dislike fees. However, the legal problem is the lack of disclosure or the allegedly misleading nature of disclosing resort fees. The Federal Trade Commission Act protects consumers from unfair and misleading advertising.

On booking websites, which allow consumers to compare prices and select the best deal, resort fees are not calculated into the costs shown. This practice of “drip pricing” gives hotels who use resort fees an advantage over their competitors, putting them ahead in things like site rankings for lower prices even if that’s not the case.

On the hotel website itself, the hotel adds the fees as you click through to make your reservation, sometimes in different, lighter font color.

Developments in 2020

A judge dismissed Marriot’s motion to have the case dismissed in December of 2019, and litigation is now in the discovery phase. Wyndham Hotels & Resorts settled a similar lawsuit, not admitting liability but paying $6 million to resolve a class action lawsuit. Additionally, a bi-partisan bill seeking to end hidden resort fees has been introduced into Congress to end hidden resort fees.