For more than a decade, Marriott International has been misleading customers about the price of hotel rooms and has earned them millions of profits, according to a lawsuit filed Tuesday by the Attorney General of China.
Prosecutor General Karl A. Racine's complaint to Superior Court says Marriott has resorted to a "misleading" and illegal business practice, known as "drip pricing," to attract consumers .
The filing indicates that the Bethesda-based hotel chain conceals the actual cost of its rooms to consumers who purchase from its website or from third-party hotel booking sites, such as Expedia. Room rates are displayed daily, but when the consumer chooses a room and provides a credit card to reserve it, Marriott often adds "service fees", "entertainment fees" or "destination fees" ranging from USD 9 to USD 95 per day the complaint alleges.
According to the complaint, customers who shop online are therefore misled into thinking that the Marriott room is cheaper than it is.
"It deprives consumers of the opportunity to make a comparison of apples to apples," said Jimmy Rock, Assistant Deputy Attorney General, Attorney General.
The tourist tax is often included in the "taxes and fees", which encourages consumers to believe that the extra costs are going to the government, not to Marriott, says the complaint.
The lawsuit follows an inquiry by state attorneys general from 50 states and the district about the competitive prices of the hotel sector and their effects on customers. The investigation identified 189 properties owned or managed by Marriott where "service fees" were charged.
Marriott spokesman Jeff Flaherty declined to discuss the complaint. "We do not comment on the ongoing litigation," Flaherty said in an e-mail, "but we look forward to continuing our discussions with other state agencies."
According to the Racine office, none of the 29 hotels managed or owned by Marriott in the district was used. But residents of California who have stayed in Marriott hotels have been the victims of false advertising, according to the complaint.
The lawsuit alleges that Marriott violated DC's Consumer Protection Act by "concealing the actual price of hotel rooms, by failing to clearly disclose all booking fees, incorrectly stating that the costs of stay are imposed by the government and misleading customers. . "
Marriott began the "misleading and deceptive" practice of "drip pricing" in 2008, Rock said.
"They quickly realized," Wow, we are making a lot of extra profits, "said Rock, who said the practice was worth at least $ 100,000 a year to Marriott." That has grown very quickly over the next two years. as a Marriott practice. "
In 2012, the Federal Trade Commission warned the hotel chain and 21 other operators that the practice could constitute a violation of federal consumer protection legislation.
Rock said that other hotel chains are also under investigation but refused to name them.
The lawsuit provides an example of booking a Marriott hotel room at the Renaissance Las Vegas Hotel in June. The initial price was $ 219. The final price was $ 282.32, an increase of $ 63.32 for "taxes and fees".
The lawsuit seeks to prevent Marriott from misleading consumers and advertising for misleading prices. He also asks for civil sanctions as a deterrent.
Rock said Marriott could pay up to $ 5,000 a time that an inaccurate price would be presented to a consumer.
In addition, the UK's Information Commissioner's Office (ICO) has announced to Marriott that it plans to fine the company over 99 million pounds, or nearly $ 124 million. , after investigating a data breach in customer bookings at Marriott's Starwood Hotels.
Personal data contained in 339 million guest records has been exposed worldwide by this cyber incident, the ICO said in a statement. It included names, mailing and e-mail addresses, phone numbers, passport numbers, dates of birth, gender, arrivals and departures information, Starwood accounting information, booking dates, communication preferences and information. encrypted payment.
Starwood's online systems were compromised for the first time in 2014, two years before the acquisition of Marriott. Guests who made reservations at any of the Starwood hotels by September 10, 2018 may be affected.
The ICO said the company had cooperated with the investigation but "failed to exercise due diligence in the purchase of Starwood and should have done more to secure its systems."
Arne Sorenson, President and CEO of Marriott International, described the data breach as "a criminal attack" and said the company was considering challenging the fine.