HILTON is being sued for “hiding the true price of hotel rooms” with resort fees or “mandatory charges.”
Guests who think they are getting a cheap room are later stung by the additional charges later in the booking process, in a move which has been slammed by law officials.
Nebraska Attorney General Doug Peterson has filed a lawsuit against Hilton, accusing it of deceptive business practices, after what he said was a nationwide investigation involving the attorneys general of all 50 states and Washington, D.C.
Mr. Peterson said Hilton engaged in “drip pricing,” a practice in which hotels hide part of the nightly rate from consumers by burying it in the fine print later in the booking process.
This allegedly allowed Hilton, one of the largest hotel chains globally with around 5,700 hotels, to list its rooms at artificially low rates, Mr. Peterson said in his lawsuit, making it harder for consumers to compare the prices hotel rooms accurately.
In a press release released yesterday, he explained: “For years, Hilton has misled consumers in Nebraska regarding the true cost of certain Hilton hotel rooms.
“They failed to heed warnings from the Federal Trade Commission (FTC) and the mounting complaints from their own customers.”
“So with today’s lawsuit, on behalf of all Nebraska consumers, I ask the court to order Hilton to make necessary and meaningful changes to its business practices – but most importantly, to be transparent about its prices.”
The lawsuit says the FTC warned the hotel industry in 2012 that drip pricing — not listing additional fees along with the base price of a room — may violate federal consumer protection law.
It also says that Hilton was aware of the warning but continued to hide its fees.
A Hilton spokesperson said the company only has resort fees at a select few of its hotels and that customers are made aware of the charges.
They said: “Resort fees are charged at less than two percent of our properties globally, enable additional value for our guests, and are always fully disclosed when booking through Hilton channels.
“We have not yet been served the related documents, so will take the opportunity to review these before providing additional comment.”
Mr. Peterson seeks to force Hilton to display all prices for its rooms upfront, pay restitution to customers it allegedly mislead, and pay fines to the government.
According to the press release, Hilton charges hidden fees at 78 properties in the US with fees between $15 (£12) and $45 (£36) per night.
The news comes just days after the announcement that Marriott was also being sued for “deceptive resort fees.”
The Attorney General for the District of Columbia in the US, Karl A. Racine, said in a series of tweets: “Today I am suing Marriott International for charging consumers deceptive ‘resort fees’ when booking hotel rooms.