Marriott Lawsuit Claims Company Made $220M Profit from Resort Fees Since 2012
Marriott has been accused in a lawsuit that it charges customers unfair fees which raise the room rate significantly higher than the posted price. The lawsuit itself is not a new development, but some recently revealed details show that the company actually makes millions from resort fees every year.
The lawsuit filings reveals how lucrative resort fees are. It alleges that Marriott hotels collected more than $220 million in resort fees dating since 2012. Its self-managed resorts made $66 million in 2012, $82 million in 2013 and $58 million through half of 2014, just from resort fees.
This information is rarely available, since resort fees aren’t normally listed as a separate item in companies’ filings with the U.S. Securities and Exchange Commission.
Marriott resort fees can usually be somewhere between $40 and $60 per night, but they can also go higher than that in some cases. Resort fees, or destination fees, originated in the 90s, but were originally intended for beachside properties and other resorts to cover costs such as free beach towels among other things. But now they are widely used in many destinations.
These additional fees are supposed to cover services such as Wi-Fi, parking, pool and gym access and more. But these were services that were already included in the price of your stay before the introduction of resort fees.
Now more than 180 Marriott properties charge resort fees, according to District of Columbia Attorney General Karl Racine’s office. Prosecutors in Washington, D.C., say Marriott violates consumer-protection laws by failing to disclose resort fees upfront, only revealing the added cost during the booking process. The false advertising presents Marriott as a much cheaper option that what it actually is.
The next hearing for the case is scheduled for March, WSJ reports. Then the court will decide whether to issue a summary judgment on the lawsuit or proceed to trial.
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This is a sad and disappointing legacy that Bill Marriott has left.
Good this is long overdue. Unlike baggage and seat fees on airlines which can be (easily) avoided, these fees are mandatory with no way around them. Include them in the room fee upfront or make them optional.