Texas settles with Marriott, sues Hyatt over "resort fees"

The exterior of the Grand Hyatt hotel is pictured during the dusk, following the coronavirus disease (COVID-19) outbreak, in Jakarta

By Doyinsola Oladipo

NEW YORK (Reuters) -The State of Texas and Marriott International Inc on Tuesday entered a voluntary agreement to prominently display all "resort fees" and to increase price transparency in its advertisements and booking process.

Texas Attorney General Ken Paxton alleges that hotel companies are engaging in fraudulent and anti-competitive practices by misleading consumers in advertisements which prevents comparative shopping and charging millions of dollars in hidden fees.

"In recent years, travelers have been caught by surprise with costs much higher than the room rates they believed they had booked," said Paxton in a statement.

In its voluntary agreement with Texas, Marriott denied it misrepresented room rates, mandatory fees or total price in its advertising nor violated Texas consumer protection laws.

The hotel operator did not immediately respond to a request for additional comment.

Marriott has voluntary agreed to disclose all "resort fees" and the total price of rooms as the most prominently displayed price, according to a statement from Paxton.

"Marriott is now taking proactive steps to promote price transparency. In contrast, other major hotel chains have defended their deceptive practices, and they will be facing the full force of the law for their actions," said Paxton.

On Monday the state also filed a suit against Hyatt Hotels Corp for allegedly violating Texas consumer protection laws by misleading consumers with marketing and charging hidden fees.

In a petition filed in district court, Paxton said U.S.-based Hyatt did not include all mandatory fees in advertised room rates which thwarted comparison shopping and charged hidden fees, amounting to millions of dollars in fraudulent charges.

Hyatt did not respond to a request for comment on Paxton's lawsuit.

(Reporting by Doyinsola Oladipo in New York; Editing by Bill Berkrot and Anna Driver)