Hyatt and Hilton Face Pressure Over Unpopular Pricing Move
It's not just President Biden pushing for a major change. He's getting help from an unlikely ally.
Republican and Democrats, at least the ones on the far left and the far right of their party's beliefs, almost never agree on anything. Tell a Donald Trump Republican and a Bernie Sanders Democrat that "at least they can agree on chocolate chip cookies," and each side will find a way to cast doubts upon that delicious treat.
That's not a political statement. It's just the reality of how things work in the United States right now, where finding common ground has, at best, become challenging and, at worst, becoming impossible. We're living in a "you say potato, I say 'not in my backyard" kind of world" where political agreement seems impossible.
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It's a political landscape where it's shocking when a Conservative Texas attorney general wants the same thing the Democratic President of the United States does (and, no, it's not Springsteen tickets). President Joe Biden and Texas Attorney General Ken Paxton both want hotel chains to stop charging hidden fees and both have taken steps to end the practice. Image source: Drew Angerer/Getty
Biden Made Hidden Fees an Agenda Item
Hotels often call them resort fees, but whatever you call them, major chains including Hyatt (H) - Get Free Report and Hilton (HLT) - Get Free Report add mandatory fees to your nightly bill that are not disclosed when consumers first see prices. You can't opt out of these fees, so Biden has been aggressive in his calls for companies to disclose them upfront.
He made the following comments in an October 2022 speech:
Last week, the Federal Trade Commission started work on a rule to crack down on unfair and deceptive fees across all industries, fees that were never disclosed — never disclosed. And there was no way to avoid the fee, like processing fees for concert tickets or like resort fees. When you think you’re paying one price to book a hotel, you only find out after checking out that there’s a “resort fee” you never heard about that’s added to your bill.
And while Hilton and Hyatt have not addressed Biden's call for change, their major rival Marriott International (MAR) - Get Free Report has.
By the end of May, Marriott will make a large change to how it displays prices, according to a new report from View From the Wing.
"The first and most prominent price for a hotel that Marriott displays will be the price inclusive of resort or destination fees, so when you search the Marriott website you won’t be duped into thinking a hotel is cheaper than it is, only to see disclosure of a higher price at checkout," the website reported. "The change will occur starting in mid-May, expected between May 15 and 23."
Biden Gets Help From the Right
Paxton likely did not make any moves just to help Biden but did sue both Hilton in late May over resort fees. The Texas attorney general claimed the hotel chain “misleadingly charge consumers higher rates than initially advertised” and that “the services purportedly funded by the fees are often complimentary or included in the room rate at other non-resort locations,” The Points Guy reported.
Paxton filed a similar lawsuit against Hyatt just a few days before.
The Texas politician issued a statement on his website that sounds a lot like what Biden had to say in his two addresses that touched on resort and other hidden hotel fees.
“Heightened inflation and worsening economic conditions have made it an even more pressing priority to protect Americans from predatory, illegal corporate practices,” said Paxton. “Many major hotel chains, including Hilton, have been deceiving their customers for far too long. I warned these companies they would face consequences for this behavior, and Texas has delivered aggressive action to protect consumers, promote price transparency in the hotel and travel industries, and ensure that companies violating our laws are held responsible for misleading the public.”
Hilton operates hotels under brand names such as Hilton, DoubleTree, Embassy Suites, Homewood Suites, Hilton Garden Inn, and Hampton Inn. Hyatt operates under more than 25 brand names including Grand Hyatt, Dreams Resorts, the Unbound Collection, and a lot more names that use some form of the parent company's name.
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