What exactly is a “resort fee” that a consumer finds added on to the price of a room at certain hotels? According to the complaint for this class action, it’s not a valid fee but a form of “drip pricing” that allows hotels to advertise artificially low prices fools consumers into thinking they’re paying less than they are.
The class for this action is all persons who, within the statute of limitations, were charged one or more resort fees at one of Defendants’ properties within the US or its territories.
The defendants are Omni Hotels Management Corporation, Omni Hotels Corporation, and TRT Development Company.
Plaintiff Armando Samaniego chose a hotel room that was advertised as costing $269 per night. However, the complaint says that when he went through the process to book the room, a $30 resort fee was added. These fees, the complaint says, have been on the rise since the 1990s, and they supposedly cover certain services, such as the provision of a towel at the hotel pool. However, the fees are usually mandatory and customers cannot simply opt to go without the services they cover.
In fact, the complaint says, resort fees are a form of drip pricing, which a Federal Trade Commission (FTC) warning letter defines as “a pricing technique in which firms advertise only part of a product’s price and reveal other charges later as the customer goes through the buying process.”
The complaint claims that drip pricing “has a powerful ability to influence and mislead consumers to spend more than they otherwise intend to or buy a product or service that they do not need or want. It cites research from the Stern School of Business that shows that consumers were more likely to buy when products and services were advertised via a drip pricing model than when the mandatory fees were disclosed up front.
According to the complaint, other research shows that “consumers tend to overvalue the original advertised price” and become “anchored” to the original figure; they then do not mentally adjust the price even after additional mandatory fees are disclosed. Drip pricing also gets consumers invested before disclosing the real price that they must pay.
In fact, the complaint claims that the “resort fee” that Samaniego was charged was for “amenities” such as “in-room Wifi, access to the hotel gym, free local and 800 access calls, and in-room coffee and tea,” things that are provided for free at some of Omni’s other properties. The complaint claims that the purpose of the added resort fees are simply to allow Omni to advertise a lower, more competitive rate for the room and then raise the price later.
Among other things, the complaint alleges unfair competition and false advertising.