Nebraska’s attorney general filed a lawsuit against Hilton for its use of ‘deceptive’ resort fees – two weeks after the District of Columbia attorney general filed a similar lawsuit against Marriott International.
Nebraska Attorney General Doug Peterson filed the lawsuit Tuesday, accusing the company of hiding the “true price” of hotel rooms from consumers and charging hidden resort fees to increase profits – the unlawful practice of “drip pricing.”
The lawsuit seeks to force Hilton to advertise the true prices of its hotel rooms up front, pay restitution to Nebraska consumers who paid deceptive resort fees, and pay civil penalties for violating Nebraska’s consumer protection laws.
According to AG Peterson, at least 78 Hilton properties in the U.S. charge such hidden fees, which range from $15 to $45 per room per night. Customers only find out about these fees after they start to book a room, the statement said, and resort fee disclosures are often hidden in obscure areas, confusingly worded, or presented in smaller print than the advertised rates.
Hilton’s failure to disclose fees harmed customers and violated Nebraska’s consumer protection laws, Peterson’s office said in the lawsuit.
“For years, Hilton has misled consumers in Nebraska regarding the true cost of certain Hilton hotel rooms,” Attorney General Peterson said in a statement. “They failed to heed warnings from the Federal Trade Commission and the mounting complaints from their own customers.”
The lawsuit said that for a customer searching for hotels in the Las Vegas, a night at the Tropicana will appear to cost $95 a night. It alleges the price is “deceptively low” because the property charges an additional $37 per night resort fee that is added onto the room rate, which is not disclosed on the search results page.
“Resort fees are charged at less than two percent of our properties globally, enable additional value for our guests, and are always fully disclosed when booking through Hilton channels,” a Hilton spokesperson told Travel Market Report. “We have not yet been served the related documents, so will take the opportunity to review these before providing additional comment.”
McLean, Virginia-based Hilton owns, manages, and franchises approximately 5,700 hotels and approximately 923,000 hotel rooms in 113 countries and territories.
The long-held practice of charging customers a resort fee – or “amenity fee” – include access to gyms, rooftop bars, swimming pools, casino credits, transportation, newspapers, and water bottles in rooms.
In November 2012, the Federal Trade Commission (FTC) warned the hotel industry that their pricing practices around resort fees may violate federal consumer protection laws by misrepresenting the true price of hotel rooms. AG Peterson said Hilton was aware of this warning and engaged in drip pricing regardless.
In the lawsuit against Marriott, D.C. Attorney General Karl Racine said “this is a straightforward price deception case.” The lawsuit also alleges Marriott took part in drip pricing, “making hundreds of millions of dollars.”
Marriott CEO Arne Sorenson has said “We’ll obviously fight it, we think it’s wrong. It’s well disclosed, and we’ll go through it.”