Over the last decade, the travel industry has increasingly seen more and more lawsuits rule outside of their favor – specifically for timeshare companies. The disappointment of the expensive product usually encourages many buyers to look for a way out. Either way, when you look at all of the legal battles within the marketplace, most defendants are represented by major hospitality chains, somewhere beneath the corporate umbrella. Earlier this summer, Hilton found themselves back in the headlines as they’re under pressure from Doug Peterson, the Attorney General (AG) in Nebraska.
Unsurprisingly, this lawsuit is very similar to Marriott’s battle with Karl A. Racine, the Attorney General of Washington DC – that was announced two weeks prior. The latest litigation effort goes to show consumer protection agencies are determined to crack down on hotel chains that manipulate online booking prices. Because of the cut-throat competition of the travel industry, resorts have been known to lower promotional prices while increasing mandatory booking fees. This makes it extremely difficult for consumers to know which hotel actually has the best deal.
Like maintenance costs for timeshare owners, resorts basically charge whatever they want for add-ons and fees during check out. While it’s made them a lot of money in the past, it seems as though it won’t be tolerated any longer. Peterson is seeking injunctive relief that requires Hilton to market hotel rooms with actual prices and repay Nebraska consumers for damages. The lawsuit also asks the court to force Hilton to cover court costs and investigation expenses while being held responsible for $2K in statutory civil penalties for every violation incurred.
Resorts Have Manipulated Prices with Fees for a While Now.
Dating back to 2012, it’s been well-documented that the Federal Trade Commission (FTC) has been heavily involved in warning hotel chains about manipulating booking fees and room prices. From writing letters to creating a special task force to publishing reports – they’ve given hospitality conglomerates plenty of opportunity to pivot away from deception. Unfortunately, Hilton, Marriott and others aren’t going to fold that easy.
According to some reports, they’ve already begun looking for loopholes that claim booking platforms and third parties are outside of their control. In other words, they don’t believe they’re liable for the misleading booking fees and prices that frustrate aspiring travelers. But Peterson isn’t buying it. “[The] defendant is liable for this practice, regardless of whether the property charging the resort fee was owned, managed, or franchised by Defendant, as Defendant’s own policies strictly control which properties may charge resort fees, under what circumstances, and in what amounts.” In other words, they should be held accountable for their actions.
While a win for each Attorney General would be a huge boon for those burdened by hidden, mandatory booking fees, it’s also a win for the travel industry as a whole. A small victory here could mean it’s only a matter of time before all price manipulation tactics are removed. One can only assume the framework is being set. There’s no one else that this would impact more than fractional owners. Maintenance fees and special assessments plague their mailbox every year. Due to a lack of disclosure, some refuse to pay these and walk away. Sadly, this creates even more fees and penalties that handicap them financially for a long time.
While improved technology has given travelers an ability to document and leverage misconduct online, the main reason legal battles are starting to rule in the consumer’s favor is what’s learned from previous lawsuits. The more informed everyone becomes, the better all of our travel experiences will be. It’s why we’ve committed to sharing as much as we can about the perks and pitfalls of the industry.