This week we begin a two-part study of the legality of the recent onslaught of disclosed and undisclosed hotel overcharges, fees and add-ons and the interference with and disabling of consumer Wi-Fi networks. As noted in Mayerowitz, Mimicking the airlines, hotels get fee-happy.
On occasion, hotels may violate federal and state antitrust laws by fixing prices or otherwise overcharging their guests for the cost of their accommodations [see In re Hawaiian Hotel Room Rate Antitrust Litigation (tourists allege violation of Federal antitrust laws by allegedly fixing prices of Hawaiian hotel room rates and commissions paid to travel agents and tour operators); Archibald v. Cinerama Hotels (California tourists allege discrimination in room rates charged mainland visitors and Hawaiian residents); Kiamesha Concord, Inc. v. Kahn (guests dispute hotel bill for $82.82 as an overcharge)].
Hotels and Internet travel sellers such as Travelocity, Priceline, Hotwire and Hotels.com may charge their customers for taxes which are (1) real [see Karbal v. Arizona Dept. Of Revenue (tourists challenge validity of Arizona “transaction privilege tax on car (3.25% of car rental price) and hotel room rentals (1% of room rates)…to fund projects sponsored by the Arizona Sports and Tourism Authority”] or (2) imagined [see Volbers-Klarich v. Middletown Management, Inc. (“The primary question… when a [hotel] fraudulently charges its customer a nonexistent tax, must the customer attempt to recover those funds through a ‘refund’ from the taxing authority or may the customer attempt to recover those funds directly from the [hotel]”); Hotels.Com v. Canales (“By its own admission, Hotels.com neither charges nor collects taxes nor does it remit taxes directly to any taxing authority”) or (3) excessive [see Christe v. Hotels.com LP (“The crux of (the) allegations stem from what is not disclosed on this invoice [for the online purchase of hotel accommodations
Hotels may assess their customers surcharges, typically, without disclosing them during the reservation process, such as (1) energy surcharges [see Snowey v. Harrah’s Entertainment, Inc. (“Plaintiff alleged that defendants charged him and other guests an energy surcharge during their stays… without providing notice of these charges during the reservation or check-in process…defendants charged more than the advertised or quoted price”); Office of Attorney General v. Wyndham International, Inc. (“the basis of this allegation was an energy surcharge of $2.50 to $3.00 per night…alleged that the surcharges had not been disclosed to consumers when they made their reservations (but was disclosed when) they checked in or…(when) they checked out”)] (2) surcharges for ordinary vendor services [Terrill v. Oakbrook Hilton Suites and Garden Inn (“we conclude that defendant has unjustly enriched itself by using the monies it collected from the tax line item in the customer bill to pay ordinary vendor services.
Hotels and Internet travel sellers may charge a “resort fee” [see Gersten v. Wyndham International, Inc. (“The complaint alleges that Wyndham engaged in a false and deceptive practice of imposing a ‘Resort Fee’ which was not disclosed when a reservation was booked and which was falsely portrayed to customers as the pass-through of taxes…Just prior to check-out the Gerstens received a statement of charges that (included) for each of the six nights of their say, a ‘Resort tax’ in the amount of $71.39 and a ‘Resort Tariff’ also in the amount of $71.39″); Wilson v.
As with airlines and rental car companies hotels and Internet travel sellers have “unbundled” their basic charges by adding an ever increasing number of fees, add-ons and service charges, many of which may be undisclosed upon making a reservation. Next week we will take a look at hotel mini-bar and Wi-Fi charges and the recent Consent Decree between Marriott International, Inc. and the Federal Communications Commission [October 3, 2014] providing for a civil penalty of $600,000 “to settle (an investigation) of allegations that Marriott interfered with and disabled Wi-Fi networks established by consumers in the conference facilities at the Gaylord Opryland Hotel and Convention Center in Nashville…in violation of Section 333 of the Communications Act of 1934″.