By Mark F. Gray, AFRO Staff Writer, [email protected]
Marriott International, the company that owns the international conglomerate of hotels around the world, is being sued by the District of Columbia for allegedly deceiving customers by charging hidden fees to increase their profits.
The Office of the Attorney General (OAG) is claiming that company’s “deceptive and misleading pricing practices” hurt customers by violating the D.C.’s consumer protection laws. In the lawsuit D.C. Attorney General Karl A. Racine is claiming Marriott has been involved in a straightforward price deception case, which has cost customers millions of dollars over the last 10 years.
“Marriott reaped hundreds of millions of dollars in profit by deceiving consumers about the true price of its hotel rooms,” said Racine in a public statement.
Marriott is being accused of an unlawful trade practice called “drip pricing” in advertising its hotel rooms.
“Bait-and-switch advertising and deceptive pricing practices are illegal,” Racine said.
Drip pricing involves the company initially hiding a portion of a hotel room’s daily rate from consumers. They are alleged to have concealed the real price of hotel rooms by advertising one rate, then charging mandatory “resort fees,” “amenity fees” or “destination fees” in addition to the advertised price after they begin to book a room. According to the indictment, at least 189 Marriott properties worldwide charge these hidden fees, which range from $9 to as much as $95 per room per day.
The allegations also state that beyond the initial price deception, when consumers select a room rate and make the payment to book it, Marriott also misrepresents that the daily room rate at the hotel is less than it was because it does not include the mandatory resort fee that Marriott adds to the daily room charge. Further, the affidavit claims the company includes the resort fee as part of a total charge called “taxes and fees,” which misleads consumers to believe the additional fees they are paying are government-imposed, rather than a separate daily charge instituted and paid to the company.
The Federal Trade Commission (FTC) warned Marriott and 22 other hotels in November 2012 that their drip pricing practices around resort fees might violate federal consumer protection laws by misrepresenting the true price of hotel rooms. Two years ago the FTC’s Bureau of Economics concluded that separating mandatory resort fees from posted room rates without first disclosing the total price is harmful to customers.
“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,” Racine said.
This lawsuit follows an investigation into the hotel industry’s pricing practices by the AGs in all 50 states and the District of Columbia.
The D.C. Attorney General is seeking a court order forcing Marriott to advertise the true prices of its hotel rooms up front. It also asks the company to pay restitution to District consumers who paid ambiguous resort fees, and pay civil penalties for violating the District’s consumer protection laws.