Consumer Group Sues Hyatt Hotels for Undisclosed ‘Resort Fees’

WASHINGTON — A consumer advocacy group is suing Hyatt Hotels over what the lawsuit filed in Washington, D.C., describes as deceptive fees.

The lawsuit invokes the District of Columbia Consumer Protection Procedures Act, which requires honest dealings, such as businesses selling products and services for their advertised prices.

It is part of a growing backlash against the hotel industry that also showed up in legislation introduced in July by members of the Senate Commerce Committee.

The pending bill is called the Hotel Fees Transparency Act. It is intended to improve transparency for consumers by requiring hotels and booking services to clearly display the final price customers will pay for rental lodging.

The Hotel Fees Transparency Act is supported by the American Hotel and Lodging Association. 

In the Washington, D.C., lawsuit, Travelers United says Hyatt Hotels tacks on “resort fees” or “destination fees” to their bills without disclosing them during the booking process. As a result, the company “has been systemically cheating consumers out of tens, if not hundreds, of millions of dollars each year by falsely advertising its hotel room rates,” says the lawsuit filed in D.C. Superior Court.

The hotel industry describes resort fees as catch-all charges to cover a variety of extra amenities, such as pool use, gym access, parking, phone calls, Wi-Fi, newspapers and shuttle service.

The class action lawsuit uses the Grand Hyatt Washington as an example. The hotel adds a $20 resort fee for each night a guest stays there.

Travelers United says the fee is not clearly mentioned on the hotel’s website as part of its room prices. Instead, it is added during checkout under the category of “taxes and fees.”

The group says the added charge is a “junk fee” that exceeds $2 billion in annual revenue for the hotel industry.

“Junk fees are not just greedy and deceptive, they are illegal,” said Lauren Wolfe, Travelers United’s Chief Legal Officer, in a statement.

“Travelers United hopes this lawsuit permanently ends this deceptive practice, and holds Hyatt accountable for their false advertising,” Wolfe said.

President Joe Biden made a plea during his 2023 State of the Union address for regulators, such as the Federal Trade Commission, to more closely monitor hidden corporate fees.

“Junk fees may not matter to the very wealthy, but they matter to most other folks in homes like the one I grew up in, like many of you did,” Biden said. “They add up to hundreds of dollars a month. They make it harder for you to pay your bills.”

Hyatt has so far declined to comment on the pending litigation.

In similar legal action against the hotel industry, the Pennsylvania attorney general’s office in 2021 accused Marriott Hotels and Resorts of violating a consumer protection law with its published room rates.

Marriott reached a settlement with the attorney general’s office in which the company agreed to include all fees in its room rates.

In Texas, the state accuses online travel site Booking Holdings of violating the Texas Deceptive Trade Practices Act by failing to disclose travel expenses listed under “taxes and fees.”

“Booking’s failure to include these mandatory fees in its initial advertisement of room rates thwarts comparison shopping and, consequently, allows Booking to lure unwitting consumers with artificially low room prices that are unavailable at the rates advertised,” says the lawsuit filed Aug. 10 in San Antonio. 

The lawsuit in Washington is Travelers United, Inc. v. Hyatt Hotels Corporation, et al., case no.: 2023-CAB-005095 in the Superior Court of the District of Columbia, Civil Division.

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