Earlier this month it was announced that Washington D.C.’s Attorney General would be suing Marriott over resort fees. Today the Nebraska Attorney General Doug Peterson has filed a lawsuit against Hilton for ‘for hiding the true price of hotel rooms from consumers and charging hidden resort fees to increase profits’. The Attorney General’s office is making three allegations:
- Hiding the true price of hotel rooms
- Failing to clearly disclose all booking fees
- Misleading consumers about what resort fees actually pay for
These are the same allegations that are made in the Washington D.C. case, the only difference is that in that case they are also alleging that Marriott misrepresented that the resort fees are imposed by the government. It’s my belief that hotels charge resort fees for two main reasons:
- They pay no commission to online travel agencies on these fees as they are collected at the hotel and are not included in the list price (basically considered an auxiliary fee such as dining)
- The list price looks more attractive to consumers (e.g in Vegas sometimes the list price will be $50, but you’ll then need to pay a $35 resort fee)
Hotel chains have long said that they are forced to charge resort fees because competitors are using them and they need to stay competitive. Although recently the Marriott CEO tried to say that resort fees are a good thing because they bundle perks that people want anyway and are a good deal. If that was the case they would be an optional extra rather than a forced fee. Large corporations like hotel management companies often say that they are capable of self regulating and that no government intervention is needed. In my opinion resort fees are a clear example that hotel chains are incapable of doing this properly and government intervention is needed. If a fee is mandatory, it should be included in the list price.
“Need to stay competitive”…by increasing your prices through resort fees? How does that make any sense. Being competitive would mean beating the other hotels prices, not matching them upward.
The real question will be whether or not Nevada follows suit (no pun intended).
When California enacts a law, most companies adopt a blanket national standard to keep things easy (e.g. emissions, opt-out email requirements). I don’t this his happening with Nebraska, since it’s so easily localized.
The companies will just eliminate the fee in Nebraska only, just like they would set specific taxes for each city.
Across the river in Iowa, their AG should take a swing at Harrah’s. I have stays coming up there that have these nonsensical fees attached. For what? The same bottle of water in the room that I could get comped on the casino floor? The wireless internet that I don’t use, because my mobile data is ten times faster?
Need to be regulated like airline prices.
Amen. And about time.
Isn’t MGM the worst offender here?
There’s doing what is right and what is easy. Clearly Marriott took the latter. I’m all about lasseiz faire. But this is clearly in need of the stick v the carrot.
This is a good thing. We should all start writing to our own state AG to follow suit.
Glad to see the state of Nebraska do something good for once.
It’s not that we regularly do bad things, more that we do nothing and a slight majority supports some bad things being done…