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AG Phil Weiser, Choice Hotels reach settlement on ‘drip pricing’ practices

Colorado Attorney General Phil Weiser Thursday announced a settlement with a hotel group intended to help remedy the kinds of hidden fees and misleading prices known as “drip pricing” — a model that he said is common practice within the hospitality industry but in violation of the Colorado Consumer Protection Act.

Choice Hotels International, Inc. agreed as part of a settlement to present the true cost of a room to customers, according to a news release. Choice Hotels owns hotel brands including Country Inn & Suites, Comfort Suites and Roadway Inn, among others.

“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,” Weiser said in the release. “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 Colorado Attorney General’s Office pursued the settlement after an investigation determined Choice was among the many hospitality companies participating in a practice called “drip pricing.”

Hotels or travel agencies that use drip pricing advertise a lower rate to draw customers in and then gradually disclose additional fees and costs to consumers as they move through the booking process, according to the attorney general’s office.

Hotels also charge fees such as resort fees — intended to cover services such as pools and fitness rooms — whether or not customers use those services.

As part of the settlement, Choice will begin prominently displaying all fees and prices on advertisements and require that third-party operators, licensees, franchisees and owners of its affiliated hotels also comply with the settlement’s stipulations. Choice Hotels is also required to provide accurate information to travel agencies and other third parties booking reservations on its behalf.

A Choice Hotels spokesperson said in an emailed statement that the company has long been committed to clearly stating any resort fees it charges at its U.S. hotels.

“For many years, consistent with guidance from State Attorneys General and the Federal Trade Commission, Choice has disclosed such fees, with disclosures and the total room price displayed on multiple web pages before the customer elects to book a room,” the statement said. “Our agreement with the State of Colorado, and other states, further enhances the way resort fees are disclosed in our booking channels and we will be working over the next several months to update the room rate display in accordance with the Assurance of Discontinuance.”

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