• If a hotel has a mandatory fee, they will have to let customers know upfront.   

Mark S. Adams, Hotel Dispute Lawyer, was a guest on the Hotel News Now podcast where he discussed the effects of mandatory fee disclosure litigation in Pennsylvania on the hotel industry.

Consumer advocacy groups, law firms and federal and state governments have begun to push back on hidden resort fees, which are often not disclosed until customers near the end of the booking process. Resort fees are charged in addition to hotel room rates and can include things like amenity fees and destination charges.

In Pennsylvania, the state’s attorney general reached settlement agreements with Omni Hotels & Resorts, Choice Hotels International and Marriott International over their fee disclosure practices. According to Adams, the main objective in these cases was to ensure full transparency. If a hotel has a mandatory fee, they will have to let customers know upfront.

“I see the impact as being multifaceted,” explained Adams. “One, it’s good for the consumers because you know what you’re buying. Two, I think it’s actually good for the industry.”

He went on to explain that because some of the biggest hotel brands have become compliant with full disclosure, the smaller brands will get on board.

“You will see people that voluntarily comply because they don’t want to be a target,” said Adams.

He also mentioned the recent order signed into law by California Governor Gavin Newsom. This new law imposes a sweeping ban on pricing goods and services without including all mandatory fees or charges. Adams discusses this law and it’s effects in detail in his recent article, “The Final Check-Out: Bidding Farewell to Undisclosed Mandatory Resort Fees,” published by the Hotel Business Review.

He pointed out the Hotel Advertising Transparency Act of 2022 and the Hotel Fees Transparency Act which are pending in Congress. These bills would prohibit hotels from advertising room rates without including additional mandatory fees and establish federal guidelines for advertising. Adams believes these bills will make their way to President Biden’s desk and that he will sign them when they do.

“I think we are going to see the end of undisclosed mandatory fees,” said Adams. While he is not against resort fees, he believes upfront disclosure will allow consumers to make an informed choice when making a booking.

You can listen to the full podcast episode here.

Mark Adams is an experienced trial lawyer and a member of JMBM’s Global Hospitality Group® and Chinese Investment Group®. He focuses his practice on business litigation including contracts, corporate and partnership disputes, and hospitality disputes and litigation. On behalf of hotel and resort owners, Mark has successfully litigated the termination of long-term, no-cut, hotel management agreements, franchise agreements, fiduciary duty issues, investor-owner disputes, TOT assessments, and more. He has wide-ranging trial experience in a variety of commercial disputes, including complex multi-party litigation and class actions. He has tried numerous cases in state courts, federal courts, and in domestic and international arbitrations, and is a frequent author and speaker on trial practice. Mark’s trial wins have been covered by Forbes, Reuters, and other publications. He has obtained two of California’s annual 50 largest jury verdicts in the same year.

Mark has taken or defended nearly 1,000 depositions throughout North America, Europe and the Middle East. He has been quoted as an expert on noncompete agreements in the Wall Street Journal. For more information, contact Mark at 949.623.7230 or markadams@jmbm.com.

This is Jim Butler, author of www.HotelLawBlog.com and hotel lawyer, signing off. Please contact us if you would like to discuss any issues or development that affect your hotel interests. We would like to see if our experience might help you create value or avoid unnecessary pitfalls. Who’s your hotel lawyer?