Marriott’s out, lives up to the bat: The battle over resort fees entered a beating phase this week.
Just as Marriott settled with prosecutors in Texas and Pennsylvania to better disclose resort fees in overall nightly room rates, the Hyatt has emerged as the latest hotel company to face a legal battle over the oft-disgraced practice. Texas Attorney General Ken Paxton sued Hyatt this week for “violating Texas consumer protection laws by marketing hotel rooms at prices that were not available to the public as advertised.”
The lawsuit specifically alleges Hyatt’s practice of charging additional hidden costs under the labels of a resort fee, amenity fee, or destination fee in addition to nightly rates as a driving force for the lawsuit. Furthermore, the Texas lawsuit alleges that many of these fees have nothing to do with upgrading the customer experience and that some are said to go toward amenities that are usually standard offerings at non-resort hotels, such as access to a fitness center and in-room Wi-Fi. the room. .
Hyatt also charged this fee regardless of whether the guest actually used the amenities, according to the Texas Attorney General’s office.
“Hyatt’s lack of transparency regarding hotel room rates misled consumers and violated Texas law,” Paxton said in a statement. “These deceptive practices have enabled Hyatt to advertise accommodations at artificially low prices, and they must end immediately. I will not stand by while Texas consumers are exploited by Hyatt, or by any hotel chain that tries to get away with imposing hidden hidden fees.” legal.”
Resort fees are loathed by travelers and have become a political baggage in recent years. Even President Joe Biden criticized the practice in his State of the Union address earlier this year.
Alleged hidden life charges
The Texas case specifically refers to the resort fee levied at the Hyatt Regency Hill Country Resort & Spa in San Antonio, which charges a $40.86 nightly resort fee (which includes the $35 nightly resort fee plus applicable state and local taxes). The attorney general notes in the lawsuit that the fact that Hyatt included these taxes with the resort fee is an acknowledgment that the resort fee is in fact part of the nightly rate and not a separate fee.
The lawsuit also used a $25.69 resort fee (which includes a $22 base fee plus applicable state and local taxes) at the Hyatt Residence Club San Antonio, Wild Oak Ranch as an example.
The Texas Attorney General points out that the Hyatt Regency Hill Country Resort has the potential to make nearly $7.5 million a year in resort fees, assuming the 500-room hotel is sold every night for a year. Using similar calculations, the Hyatt Residence Club San Antonio had the potential to make about $2.7 million in resort fees.
Potential life defense
The sticking point in many of these lawsuits is how transparent the hotel company must be.
The lawsuit from the Texas Attorney General states that it was not the total final price that was shown to the customer anywhere in the reservation process; The exact total with these fees included will not be known to the customer until after checkout.
While Hyatt’s defense likely sounds a lot like Marriott in its case, Hyatt noted early in the reservation process that an additional resort fee would eventually be added to the total nightly rate. Marriott often indicated how they similarly categorize these fees in blue boxes early in the reservation process.
“As a matter of practice, we do not comment on pending litigation, but we are familiar with this matter industry-wide,” a Hyatt spokesperson said in a statement to TPG. “While we are transparent about how we disclose fees in our reservation process today, our priority is caring for our guests, so we are actively working to make improvements to the guest booking experience by displaying rates, fees, and inclusions. We will continue these efforts for the benefit of our guests and plan to implement changes in the coming months.” .
If that sounds a little familiar, that’s because Marriott CEO Anthony Capuano used similar verbiage in a recent investor call regarding the company’s new policy of including resort fees in the hotel’s publicly offered price. Marriott maintained that it was transparent all along in offering resort fees, but was the first to collect them in nightly rates as part of the settlement in Pennsylvania.
Will this become the new norm? Capuano was not ready to step in.
“It’s not like those were masked in some way. We’re simply articulating and enhancing that transparency,” he said on the company’s first-quarter earnings call earlier this month. I’ll leave it up to the state. [attorney general] across the country to the rest of the industry. But I am pleased that we will lead the industry in terms of transparency in disclosing information to our guests.”
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