Marriott sued by DC alleging fraudulent resort fees

• The District of Columbia on Tuesday sued hospitality chain Marriott International, alleging that mandatory resort fees tacked onto hotel bills are misleading and illegal.
• The suit alleges that the hotel chain falsely advertises one rate before tacking on additional fees to the final room price.
• The lawsuit resulted from an ongoing investigation into the hotel industry begun in 2016 by attorneys general in all 50 states and the District of Columbia.

District of Columbia Attorney General Karl Racine on Tuesday sued Marriott International, claiming that mandatory resort fees the hotel chain charges are misleading and illegal. It’s the first lawsuit to come out of an ongoing multi-state investigation into pricing practices in the hotel industry.

The suit alleged that the Bethesda, Maryland-based company has misled customers for at least the past decade by using “drip pricing,” or falsely advertising one rate before tacking on additional hidden fees to the final room price.

Consumers comparing prices on Marriott’s website or on booking sites like Priceline and Expedia often discover the total price only after they’ve started the booking process, said the complaint. Racine’s office also said Marriott often lists resort fees under the heading “Taxes and Fees,” misleading consumers into thinking the additional charges are government-imposed. The charges may also be called “amenity fees” or “destination fees.”

At least 189 Marriott properties around the world charge resort fees, which can add up to $95 per room per day, according to the complaint. The lawsuit said the hotel company has reaped hundreds of millions of dollars in additional revenue as a result. “Consumers have a right to know what exactly the room price is right away,” Racine told CBS MoneyWatch.

Marriott declined to comment on pending litigation, but a spokesperson said the company will continue discussions with other state attorneys general.

State attorneys general team up

The lawsuit directly resulted from an ongoing investigation into the hotel industry begun in 2016 by attorneys general in all 50 states and the District of Columbia. The Federal Trade Commission in 2012 also warned 22 hotels, including Marriott, that their pricing practices violate federal consumer protection laws. The agency released a 2017 report that said “separating mandatory resort fees from posted room rates without first disclosing the total price is likely to harm consumers.”

The District of Columbia is seeking a court order forcing Marriott to advertise true prices of hotel rooms, to pay restitution to D.C. customers and to pay civil penalties.