Washington, DC hopes to finally kill off hotel resort fees the old fashioned way: a lawsuit. The District Attorney General announced the suit against Marriott International for violating DC’s Consumer Protection Procedures Act by charging the fees to tens of thousands of consumers from the District in recent years.
We are seeking a court order to force Marriott to:
✅Advertise the true prices of its hotel rooms up front
✅Pay monetary relief for DC consumers who were charged deceptive resort fees
✅Pay civil penalties for violating DC’s consumer protection laws
— AG Karl A. Racine (@AGKarlRacine) July 9, 2019
At issue is whether the DC laws can be applied to a multinational company, as well as if the “drip pricing” mechanism can truly be outlawed. Less significant, but still relevant to the case, is Marriott’s representation of the resort/destination fee as part of a “taxes & fees” line item that the District asserts “led consumers to believe the resort fees were government-imposed charges.”
The lawsuit targets only Marriott today (on the same day that a $125mm fine was announced related to the SPG database hack), though presumably could also apply to other hotel chains or even individual properties with similar policies. It is hard to see how the DC Attorney General is going to solve the problem more broadly if the office has to fight each of these battles individually. And, unlike the airline industry where a single ruling by the Department of Transportation addressed the situation completely, there is no enforcement body that appears empowered to make such a ruling for hotels or other segments.
There’s also the question of why hotels are being targeted for not listing all-in pricing when pretty much every industry in the USA – except for auto fuel and airlines – doesn’t face that requirement. It would almost certainly be better for consumers if they all did, so that is not necessarily a strong justification for hotels not being required to do such, but I would expect that Marriott will use that as part of its defense.
Somewhat surprisingly, the District AG does not make mention of the tax avoidance facet of the fees. Because they are not part of the base room rate they don’t get charged the same taxes in some jurisdictions. Then again, this is a consumer pricing lawsuit, not a taxes play, so it probably makes more sense than not.
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