DENVER — Colorado Attorney General Phil Weiser (D) announced a settlement Thursday with hotel chain Choice Hotels International, Inc.
Weiser’s office said an investigation found Choice Hotels misrepresented room rates, mandatory fees, and the total price in its advertising to consumers for the company’s name-brand and affiliated hotels.
Choice Hotels owns several hotel brands including Radisson, Country Inn & Suites, Comfort Suites, EconoLodge, and Roadway Inn.
Weiser said the settlement will force Choice Hotels to inform consumers of any room rates, mandatory fees, and previously-hidden prices, such as resort fees, in future advertisements.
The investigation focused on the practice commonly referred to as “drip pricing.” Weiser said Thursday the drip pricing model is deceptive and a violation of the Colorado Consumer Protection Act.
Hotel chains and online travel agencies use drip pricing to gradually disclose fees to consumers as they go through the booking process. Under such pricing, customers often don’t learn the total price of their booking until the end of the online booking process or, in some cases, until they check in at the hotel.
“With drip pricing, hotels lure customers with an advertised price that reflects only a portion of the full price, while hiding other charges, such as resort fees, until later in the buying process. Consumers should know up front the full price they are paying for a hotel room so they can make a booking that best fits their budget,” said Attorney General Weiser.
“I appreciate that Choice Hotels cooperated with our investigation and agreed to clearly disclose all fees in the future. Sunshine is the best disinfectant. We will continue to combat hidden fees to protect consumers and their pocketbooks.”
The settlement also stipulates that Choice Hotels enforce third party compliance from their operators, licensees, franchisees, and owners of affiliated hotels. This includes consistent and accurate reporting on room pricing.
Weiser’s office also said Choice Hotels is required to provide accurate pricing information to online travel agencies and other third parties that offer reservations at Choice Hotels.
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