Hotels Face Lawsuits Over Billing Practices

Orlando, FLCustomers are expected to pay an estimated $1.75 billion this year in "automatic" hotel fees and surcharges, including the "safe warranty fee." However, some of these hotel billing practices are illegal and lawsuits are now being filed challenging hotels for not disclosing their automatic fees until guests check out.

Hotels are finding a number of ways to increase their revenue, including additional fees such as fees for safes, amenities fees, energy surcharge fees, and mini bar restocking fees. Fees for hotel safes and amenities are often charged regardless of whether or not customers actually use those services. Unfortunately, the only way to remove such fees, known as negative options, is to ask to have the charges removed from the bill. Negative option fees are illegal in several states.

The Florida Attorney General's Office is investigating Tri-State Hospitality Inc., which operates Sleep Inn & Suits and Choice Hotels International, and Boulevard Motel Corp., which runs Comfort Inn. The investigation, which involves automatic charges and fee disclosures, began after state employees noticed charges on their bills they had not been informed of when they booked their hotel rooms.

The same investigation resulted in a settlement with Wyndham International in which Wyndham agreed to list automatic charges along with rates that are quoted upfront. Furthermore, Wyndham will refund $560,000 to hotel guests who stayed at the company's properties between May 29, 1998 and July 28, 2006. According to court documents, the investigation involved Wyndham charging automatic fees including the "safe fee," "safe warranty charge," "resort fee," "energy fee or surcharge," and other automatic fees.

In 2005, Marriott International and Starwood Hotels and Resorts also agreed to inform customers about automatic charges. The two companies were not required to refund customers for the automatic charges.

According to federal law, guests must be notified about add-on fees and hotels must show such fees "clearly and conspicuously". However, when and how that happens is inconsistent. One of the problems with the hotel safe warranty fee is that it is automatically posted to a guest's bill and is usually not disclosed when the guest checks in. In fact, many guests do not even realize they have been charged a "safe warranty fee" until well after they have paid their bill.

According to a newsletter issued by the Florida Attorney General's Office, "Undisclosed add-on charges give the impression, of course, that hotel prices are lower than they really are when travelers are shopping for a place to stay." They prevent consumers from comparing the real cost of hotel stays because customers do not learn about the additional charges until they check out, and sometimes they don't ever learn that they've paid additional charges.

If you have been charged a "safe warranty fee" and were not informed of the fee until you checked out of the hotel, contact a lawyer to discuss your options. More lawsuits will likely be filed as the investigation into hotel billing practices continues.