Hyatt Hotels (H) has a big new problem on its hands that could result in a better options for potential guests.
Texas Attorney General Ken Paxton is suing Hyatt Hotels for what the state calls "deceptive trade practices" due to allegations that the hotel would market rooms at prices that were not actually available to the public.
DON'T MISS: Google Just Launched a Dramatic Gmail Change That Could Negatively Affect Users
Hyatt gets away with the practice by tacking on "mandatory and unavoidable fees" -- like resort fees, destination fees, or amenity fees -- that serve to balloon the price of a stay at the hotel.
“Hyatt’s lack of transparency regarding hotel room prices has misled consumers and violated Texas law,” Paxton said. "These deceptive practices enabled Hyatt to advertise lodging at artificially low rates, and it must end immediately."
The state accuses Hyatt of changing the final room rate during checkout and not including the mandatory fees in the quote price. The lawsuit also says Hyatt has billed customers twice for the same mandatory fees, charging them twice as a fee and then also as a tax.
The FTC describes such shenanigans as "drip pricing," according to the lawsuit in which firms only advertise part of a product's price before adding on the additional charges as the customer goes through the buying process.
"Hyatt’s lack of transparency in advertising thwarts consumers’ comparison shopping, misleads consumers about the true room rate, and places hotels that do not engage in similarly deceptive practices at a competitive disadvantage," the lawsuit states.
Hyatt did not immediately return a request for comment.
Receive full access to real-time market analysis along with stock, commodities, and options trading recommendations. Sign up for Real Money Pro now.
