Hyatt Hotels Corporation has become the latest major hotel chain to face legal action over its pricing practices, with a class-action lawsuit accusing the company of misleading consumers through hidden fees that only appear during checkout.
The advocacy group Travelers United filed the lawsuit on August 18, 2023, alleging that Hyatt advertises room rates that don’t include mandatory charges like “destination fees” and “resort fees” — costs that consumers only discover after they’ve selected a room and begun the payment process.
It’s not just private groups taking aim at these practices. Texas Attorney General Ken Paxton has also sued Hyatt for violations of the Texas Deceptive Trade Practices Act, claiming the hotel chain fails to disclose these additional fees until a customer has nearly completed the booking process.
A Growing Industry Problem
Sound familiar? That’s because Hyatt isn’t alone in facing such allegations. The hotel industry’s pricing practices have come under increasing scrutiny as consumers and regulators push back against what many call “drip pricing” — advertising one price, then adding mandatory fees later in the transaction.
Marriott International reached a settlement with Texas on May 16, 2023, over similar fee disclosure issues. Not long after, Paxton’s office turned its attention to Hilton, filing another lawsuit later that same month.
What exactly are these hidden charges? According to the Travelers United complaint, they include fees that appear only during the final checkout process, tucked away under the broader category of “taxes and fees” — making them easy to miss and difficult to compare when shopping across different hotel chains.
Consumer Confusion by Design?
Critics argue this pricing strategy isn’t accidental but deliberately crafted to make comparison shopping difficult. When consumers search for accommodations based on advertised rates, they may select a hotel that appears less expensive, only to discover at checkout that the final price is substantially higher due to these mandatory fees.
“The practice essentially amounts to a bait and switch,” said one industry observer who wasn’t authorized to speak on the record. “Consumers think they’re getting one price, and end up paying something completely different.”
The Texas Attorney General’s actions against multiple hotel chains suggests a broader regulatory push to bring more transparency to hotel pricing. The state contends that these practices violate consumer protection laws by misleading customers about the true cost of their stay.
Will this wave of litigation finally change how hotels advertise their rates? That remains to be seen. The industry has long defended these fees as covering genuine costs for additional amenities and services.
But for now, travelers booking hotels might want to budget extra time — and extra money — when making reservations, as the full price may not be what initially meets the eye.
