Hilton Hit with Class Action Over Allegedly Unlawful ‘Hidden’ Hotel Room Fees

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Hilton Worldwide Holdings Inc. and Hilton Domestic Operating Company Inc. face a proposed class action that alleges the hotel operators trick consumers into paying more for their hotel rooms by adding hidden fees at checkout.

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The 33-page lawsuit out of Washington, D.C. says that Hilton’s last-minute surcharges—which include “destination fees,” “resort fees,” “mandatory charges,” or other taxes and fees—can raise initially advertised hotel room prices by more than $35 per day.

According to the case, Hilton induces consumers to pay more for rooms than they otherwise would have by deceptively revealing these “junk fees” after they’ve already invested time and effort into selecting the room and “psychologically committed” to their purchase. As such, the Federal Trade Commission has categorized this practice, known as “drip pricing,” as an unlawful, unfair and deceptive act, the filing notes.

Per the suit, Hilton also employs a practice known as “partitioned pricing,” wherein junk fees are initially “partitioned” from the total price. This tactic prevents consumers from effectively comparing hotel room costs against the price of rooms offered by other hotel companies, the complaint says.

“Unless the total price is disclosed upfront, consumers are not reasonably able to make an informed decision as to which product or service would be most favorable for them to purchase,” the filing relays, claiming that drip and partitioned pricing are considered unlawful trade practices under the District of Columbia Consumer Protection Procedures Act.

The complaint claims the defendants have reaped “tens, if not hundreds, of millions of dollars in extra (and unearned) profits each year” by falsely advertising room rates across their extensive portfolio of hotel brands, which includes Waldorf Astoria, LXR, Conrad, Canopy, Signia by Hilton, DoubleTree, Embassy Suites, Hilton Garden Inn, Hampton by Hilton and more.

For example, online advertisements for the Washington Hilton state that the lowest nightly room price is $595, the filing notes. Per the suit, consumers are taken through several steps in the booking process until it’s eventually revealed that they must pay a $20 “mandatory charge” per night and $98.16 worth of taxes. 

The case contends that Hilton never presents consumers with an accurate room price, given that the incomplete room charge of $595 is always shown partitioned from the extra fees.

The complaint further argues that by calling the $20 fee “mandatory,” Hilton gives the false impression that this is an amount the company is “obligated to charge by law or for other reasons outside of its control, rather than a fee Hilton chooses to charge for its own solitary gain.”

The lawsuit looks to represent anyone in the United States who booked a room at a Hilton hotel within the District of Columbia for personal use and paid a resort, destination and/or other similar fee to Hilton.

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