Marriott CEO rejects 'drip pricing' allegations, defends its resort fees
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Washington D.C. Attorney General Karl Racine, who is accusing the hotel giant of “drip pricing,” or charging consumers hidden fees, shouldn’t expect a quick settlement in his lawsuit against Marriott (MAR).
Instead, the attorney general should expect an extended backyard brawl — done via the courts, naturally.
“It’s frustrating of course because we have had resort fees at resorts in our system for about over a decade,” Marriott President and CEO Arne Sorenson told Yahoo Finance.
Finding the source of Sorenson’s frustration isn’t hard.
A week ago, Racine filed a suit alleging Marriott has been charging “deceptive resort fees” for years. According to the public filing, Racine believes Marriott has failed to disclose the true price of its hotel rooms online. The company has also allegedly misled consumers about what the resort fees actually pay for — a practice called “drip pricing” — that is allegedly designed to simply pump up Marriott’s profits.
The attorney general said Marriott has acted improperly on this front for “at least” a decade and has reaped “hundreds of millions” of dollars over this timespan. Racine is seeking unspecified fines and a change in Marriott’s pricing policies.
Sorenson — a lawyer by training — told Yahoo Finance that Marriott’s disclosures on resort fees have been “right.” Resort fees can include a variety of different things, Sorenson said, including a drink or drink credit for inside the hotel. Sorenson believes the approach to resort fees is a “fair” one to take and is a practice seen industry-wide.
“We think we will defend ourselves well in this lawsuit,” Sorenson said.
Brian Sozzi is an editor-at-large and co-host of The First Trade at Yahoo Finance. Follow him on Twitter @BrianSozzi
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