MGM Resorts Sued for False Advertising Via Resort Fees by Travelers United

An advocacy membership organization which represents all travelers has filed a lawsuit against MGM Resorts International for violations of the Consumer Protection Procedures Act, claiming that the casino and lodging company uses advertising to purposely deceive potential customers to book reservations by not immediately disclosing mandatory resort fees until once the process of booking reservations has already begun — which causes the initial room rates at hotel properties to appear to be less expensive than competitors.

MGM Resorts Sued for False Advertising Via Resort Fees by Travelers United

MGM Grand Las Vegas

Photograph ©2017 by Brian Cohen.

The lawsuit is not the first one of which mandatory resort fees are the focus, as Marriott International was sued for charging deceptive resort fees by the attorney general of the District of Columbia and Hilton was sued for charging deceptive resort fees by the attorney general of the state of Nebraska.

“MGM advertises a less expensive price and then they add a mandatory hotel fee to the room rate at a later part of the booking process. Guests are required to pay extra above and beyond any advertised price. This is a case of false advertising”, according to this article written by Charlie Leocha, who is the chairman and founder of Travelers United, which is the advocacy membership organization that filed the lawsuit. “Basically, this chain of hotels has been advertising false overnight rates to consumers and then adding mandatory resort fees to the room rate at a later point in the booking process, or after the booking process. For instance, the room rate may be listed as $100 on the hotel website. Then, after travelers click on the hotel because the price is appealing, they complete the transaction on either a third-party site or on the hotel’s site and later learn that the room rate is not the complete overnight charge because an additional mandatory fee is added to the room rate. Resort fees are often required to be paid at check in, instead of at the time of booking.”

Although Travelers United has been working with the Federal Trade Commission of the United States for years, the government agency has not acted and has thus failed consumers in the United States with its inaction on this alleged false advertising.

Leocha accuses the casino and lodging company of lying to its customer pertaining to an overnight stay at any of the hotel and resort properties within its portfolio: “MGM does not include these daily, mandatory fees in the advertised room rate. Thus it deprives consumers of the ability to readily comparison shop for a room at an MGM hotel. These mandatory fees are neither included in the price of competitors’ hotel rooms nor at other MGM hotels.”

Mandatory Resort Fee Sometimes Costs More Than the Room Rate

The Luxor Hotel & Casino Las Vegas is one of the casino and hotel properties within the MGM Resorts International portfolio which is used as an example by Leocha through which “MGM regularly uses resort fees to more than double the advertised room rate” and gives a detailed example.

I decided to take an updated look for myself.

Click on the image for an enlarged view. Source: Luxor Hotel & Casino Las Vegas.

Luxor Hotel & Casino Las Vegas is currently offering potential customers the opportunity to save 33 percent off of flexible room rates when staying a minimum of three consecutive nights.

Click on the image for an enlarged view. Source: Luxor Hotel & Casino Las Vegas.

I saw a room rate of $23.00 on Wednesday, March 17, 2021; so I decided to start the booking process to reserve three consecutive nights — meaning that checking out of the hotel property would occur on Saturday, March 20, 2021.

The most inexpensive room was for the Pyramid Two Queen room, through which I would save $27.72 per night on average — or a total of $83.16 — for all three nights. I could only book the low base room rate of $23.45 if I book through the offer to stay for a minimum of three nights — the base room rate of the third night alone is $119.93 — otherwise, the base room rate increases to $35.00 if I book a reservation for only one night and check out of the hotel property on Thursday, March 18, 2021…

Click on the image for an enlarged view. Source: Luxor Hotel & Casino Las Vegas.

…and the most inexpensive room was once again for the Pyramid Two Queen room…

Click on the image for an enlarged view. Source: Luxor Hotel & Casino Las Vegas.

…and the mandatory daily resort fee is $35.00 — the same amount as the base room rate of $35.00 for the night. Add the estimated tax of $4.68; and the $35.00 room is suddenly $79.37 for the night. If the base room rate was indeed $23.45, the mandatory daily resort fee would indeed be greater than double the base room rate before tax is added to the total.

What do you get in return for paying the mandatory daily resort fee of $35.00 per day at Luxor Hotel and Casino Las Vegas?

  • Property-wide high speed internet access — public spaces and in-room
  • Unlimited local and toll free telephone calls
  • Airline boarding pass printing
  • Fitness center access for guests who are 18 years of age or older
Caesars Palace Las Vegas

Photograph ©2018 by Brian Cohen.

The mandatory daily resort fees have nothing to do with services actually rendered, as during the current 2019 Novel Coronavirus pandemic, services were either reduced or eliminated; and fitness centers were closed — but the fees did not waver, as the cost of a mandatory daily resort fee never decreased. Besides, would you voluntarily pay $35.00 for the aforementioned services — especially if you have a mobile telephone and can have your boarding pass printed free of charge at the airport or available on your smartphone?

“Travelers United is filing this lawsuit after almost a decade of little government action. DC law allows non-profits to bring suit to enforce existing state laws regarding misleading and deceptive advertising and that is what we are doing here. Travelers United has advocated for almost a decade, since the first resort fees emerged, against this deceptive and misleading advertising”, claims Leocha in the aforementioned article. “MGM Resorts International deceives customers. They charge mandatory hotel fees beyond government taxes and fees. MGM adds to the deception by charging resort fees on ‘comped’ rooms. This kind of deceptive and misleading pricing is in clear violation of the District Consumer Protection Procedures Act.”

Summary

Las Vegas

Photograph ©2018 by Brian Cohen.

Las Vegas is known by many monikers. One of them is Sin City. Charging mandatory daily resort fees — or guest amenity fees, facility fees, destination fees, or any other derivative — to unsuspecting customers instead of simply including them in the advertised price is a sin, in my opinion.

Some people may claim that finding out about mandatory daily resort fees at a hotel or resort property is up to the due diligence of the customer. That may technically be true; but what about the loyal customer who is offered a complimentary — or “comped” — hotel room who is still required to pay these insipid fees and had not had that disclosed with the offer? What about the government employee who may be conducting official business in Las Vegas and is required to pay the lowest room rate found — only to be charged a mandatory daily resort fee which can easily be greater than the base room rate itself and possibly indirectly defrauding the taxpayers who pay his or her salary? What about guests who may mistakenly believe that the mandatory daily room rates are actually imposed by the government as taxes instead of imposed voluntarily by the hotel or resort property itself? What about the person who decides to book a reservation at an online travel agency — where mandatory daily resort fees are usually not immediately disclosed in the advertised price after comparing room rates at competing properties — instead of at the official Internet web site of the hotel or resort property?

Simply booking a hotel room at a reasonable room rate should not be an overly complicated process. However, MGM Resorts International is certainly not the only casino and hotel company in Las Vegas which charges mandatory daily resort fees, as many major lodging companies — typically with casinos and entertainment venues — charge them as well.

That I vehemently oppose the implementation of mandatory daily resort fees, facilities fees and destination fees is no secret to you if you have been a reader of The Gate for years — they should either be optional or eliminated altogether — and I will just let this extensive body of work over the years pertaining to mandatory daily resort fees speak for me…

All photographs ©2014, ©2017, and ©2018 by Brian Cohen.


 

3 thoughts on “MGM Resorts Sued for False Advertising Via Resort Fees by Travelers United”

  1. NB_ga says:

    Yes… of course, it would be grand if all products and services were fully priced to include all taxes and fees and surcharges and extras so we could easily, at a glance, compare options. But I do not feel that any company has any obligation at all to make it that easy for me. It is my responsibility to do my due diligence.

    If a lodging provider chooses to advertise an insanely low room rate then add an exorbitant resort fee – as long as it is disclosed prior to making a final commitment and entering payment information (which is clearly the case in your example above) – I am good with that. It is irrelevant to me what the charge is meant to cover – even if is essentially nothing. It is on me to look at the final cost. And if I cannot manage to add a few numbers on my own, what business do I have making reservations?! If an advertiser repeatedly attempts to hide costs in a way that makes me uncomfortable… I generally stop shopping with them. My call. But certainly not something to sue over. Our society is far too litigious as it is. Encouraging even more pandering to people who do not want to look out for themselves just lowers the bar overall. Buyer beware… otherwise known as take care of yourself.

    1. Brian Cohen says:

      I agree that lawsuits can only go so far, NB_ga.

      The best medicine is to not patronize the hotel or resort properties which engage in these potentially deceptive practices. Money talks.

      Speaking for myself, I spend a lot of time researching every trip I take. This involves airlines, lodging companies, rental cars, other forms of transportation, attractions, places of interest, and dining establishments. Any entity which intentionally tries to further complicate an already tenuous process typically does not get patronized by me.

      1. NB_ga says:

        Exactly as it should be!

        Companies that are sleazy will lose their customers – at least those customers with any sense at all. Let natural attrition be the cause of their demise, not a costly lawsuit that benefits only the attorneys.

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