D.C. suit alleges Marriott used deceptive ‘drip pricing’

For more than a decade, Marriott International has been misleading guests about hotel room prices and earning millions in profits as a result, according to a lawsuit filed Tuesday by the District of Columbia’s attorney general.

The complaint, filed in District of Columbia Superior Court by Attorney General Karl Racine, says Marriott used a “deceptive” and illegal trade practice called “drip pricing” to lure consumers.

The filing says the Bethesda, Md.-based hotel chain hides the true cost of

its rooms from consumers shopping on its website or on third-party hotel reservation sites such as Expedia.com.

Daily room rates are posted, but as the consumer selects a room and provides a credit card to reserve it, Marriott often adds a “resort fee,” an “amenity fee” or a “destination fee” ranging from $9 to $95 per day, the complaint alleges.

Because of that, the complaint says, customers comparison shopping online are misled into thinking the Marriott room is less expensive than it is.

“It robs consumers of the ability to make an applesto-apples comparison,” said Jimmy Rock, assistant deputy attorney general for the District.

Often, the resort fee is included in the “taxes and fees” charge, which leads consumers to believe the extra fees go to the government, not to Marriott, the complaint says.

The lawsuit follows an investigation by the attorneys general of 50 states and the District into competitive hotel industry pricing and its effect on customers.

The investigation identified 189 properties owned or managed by Marriott where “resort fees” have been charged.

Marriott spokesman Jeff Flaherty declined to discuss the complaint. “We don’t comment on pending litigation,” Flaherty said in an email, “but we look forward to continuing our discussions with other state AGs.”

None of the 29 hotels that Marriott manages or owns in the District was found to use the practice, Racine’s office said. But Washington, D.C. residents who have stayed at Marriott properties elsewhere have been victims of false advertising, the complaint says.

The lawsuit alleges Marriott has violated the District’s Consumer Protection Procedures Act by “hiding the true price of hotel rooms, failing to clearly disclose all booking fees, misrepresenting that resort fees are imposed by the government, and misleading consumers about what resort fees actually pay for.”

Marriott began the “deceptive and misleading” practice of “drip pricing” in 2008, Rock said.

“They quickly realized, ‘Wow, we’re making a lot of additional profit off this,’” said Rock, who estimated that the practice yielded at least $100,000 annually for Marriott. “It grew very quickly over the next couple of years as a practice inside Marriott.”

In 2012, the hotel chain, along with 21 other operators, was warned by the Federal Trade Commission that the practice could violate federal consumer protection law.

Rock said other hotel chains are also under investigation but declined to name them.

The lawsuit provides an example of booking a Marriott hotel room at Renaissance Las Vegas Hotel in June. The initial price was $219. The final price was $282.32 - a $63.32 increase for “taxes and fees.”

The lawsuit seeks to stop Marriott from bait-andswitch pricing. It also seeks civil penalties as a deterrent.

Rock said Marriott could pay up to $5,000 for each time an inaccurate price was presented to a consumer.