A legal dispute involving “junk fees” has been initiated against Hyatt Hotels Corp., making Hyatt the latest major hotel company dealing with a fee-related lawsuit.
Consumer advocacy group Travelers United filed a class action against Hyatt with the Superior Court of the District of Columbia, alleging that the hospitality 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.”
Travelers United accused Hyatt of using extra charges labeled as “destination fees” or “resort fees” to inflate hotel rates while failing to sufficiently disclose these mandatory fees during the booking process.
In the lawsuit, Travelers United specifically highlights the Grand Hyatt Washington, which charges guests a destination fee of $20 per night. When booking via Hyatt’s website, however, Travelers United claimed that this fee was not clearly advertised as part of the total room price, resulting in what the group described as “partitioned pricing.”
According to Travelers United, this practice violates the District of Columbia Consumer Protection Procedures Act, which the group said requires businesses to sell goods and services for their advertised prices.
“Due to this partitioned pricing, consumers still could not reasonably compare the costs and benefits of a given Hyatt hotel room to other rooms available through Hyatt and at other companies,” argued Travelers United.
The Travelers United lawsuit comes as resort fees and other mandatory charges face mounting legislative pressure, with the Biden administration pledging to crack down on “excessive, hidden and unnecessary fees” across a variety of industries — including hotels– via the Junk Fee Prevention Act introduced in March.
Marriott International, Hilton and MGM Resorts have also been ensnared in legal battles over resort fees.
Most notably, Marriott in 2021 came under investigation by the Pennsylvania attorney general’s office after being accused of violating consumer-protection law. Marriott ultimately reached a settlement with the AG’s office, under which the hospitality giant was required to start including fees in its room rates.
Booking Holdings has also come under fire, with the state of Texas filing a lawsuit against the company earlier this month. In its complaint, the state accused Bookings Holdings — parent company of Booking.com, Priceline and other online travel agencies — of misleading customers by failing to display total hotel room rates inclusive of resort fees, destination fees and other mandatory charges in its initial advertisements.