Back in 2012, the Federal Trade Commission put out a warning to hotels that their Internet booking sites "may violate the law by providing a deceptively low estimate of what consumers can expect to pay for their hotel rooms.
"We believe that online hotel reservation sites should include in the quoted total price any unavoidable and mandatory fees," the FTC continues, "such as resort fees, that consumers will be charged to stay at the hotel. While a hotel reservation site may break down the components of the reservation estimate (e.g., room rate, estimated taxes, and any mandatory, unavoidable fees), the most prominent figure for consumers should be the total inclusive estimate."
That seemed to settle the matter until Studio City resident Benjamin Brin wanted to stay at the Palazzo in June 2014. Until he received his billing receipt, Brin didn’t realize he was on the hook for three nights’ worth of resort fees, at $28 a night.
So Brin took Palazzo to court. "Nowhere in the reservation system page, including the price, is the resort fee specified," asserted his lawsuit. Within days, his litigation had gained class-action status. (Vegas resort fees, incidentally, pale in comparison to the ones charged elsewhere. Fisher Island Hotel & Resort tacks on $107 in resort fees to its room rates.) "The Palazzo Hotel," CBS News Travel Editor Peter Greenberg reported, "they have now included that resort fee in their registration forms but you need a magnifying glass to find it." Prior to that revision, the site merely quoted a room rate "excluding taxes and fees."
The Brin lawsuit alleged that there were "hundreds or thousands [of Californians] who have been charged resort fees under this unlawful pricing technique." Not only was Las Vegas Sands unruffled by the litigation, it since has raised its resort fee to $30 a night. It could afford to, in a sense: Brin’s class-action suit failed to gain any traction and Las Vegas Sands confirms that it is no longer pending. In case you’re wondering, the odds favored Las Vegas Sands in the Brin litigation. It had won a 2012 lawsuit which also involved resort fees. That verdict is currently on appeal.
(Although Las Vegas Sands’ spokesman Ron Reese confirmed the expiry of the Brin lawsuit, Brin’s lawyer, Brian Kabateck says that there are merely "no new developments." However, since Las Vegas casino companies never, ever comment on pending litigation, we’re inclined to believe Reese.)
One property, Lake Placid, New York’s Whiteface Lodge, bucked the trend and saw dividends. After it removed its resort fees in 2012, online reviews of the hotel increased in favorability by 500 percent.
Mountaineer Casino, in Wheeling, West Virginia, lost a court case –- as did high rollers -- last year when a county judge ruled that the casino was required to collect the statutory 6 percent hotel-room tax, even when the room had been comped. The casino argued that it couldn’t tax something that was free but Hancock County Circuit Court Judge Ronald Wilson was not persuaded. Since the casino was comping approximately 70 percent of its rooms, Hancock County was looking at a $2 million windfall.
Incidentally, Station Casinos was one of several hoteliers involved in a 2004 class-action lawsuit over fees not disclosed until check-in. During a three-year period from April 2001 to April 2004, Station had been charging customers $1 for use of the in-room phone (regardless of whether it was used or not) and a $3.50/day "energy surcharge." The courts ordered Station to issue coupons worth at least $2.50 to 940,000 customers who were deemed to have stayed at a Station casino during those three years. Station was not required to rescind the policy, though.
