Wyndham Class Action Lawsuit Claims ‘Resort Fees’ are Illegal

A proposed class action lawsuit has been filed against Wyndham alleging the daily “resort fees” charged when consumers book rooms through the website is in violation of the New Jersey Consumer Fraud Act (CFA) and the New Jersey Truth-in-Consumer Contract, Warranty and Notice Act (TCCWNA).

Plaintiff Thomas Luca Jr. claims that the “resort fee” charged by Wyndham is assessed deceptively and does not reflect the true nature of the charge, therefore misleading consumers.

“Defendants’ failure to adequately disclose the resort fee charge as part of the true cost of renting a hotel room is deceptive and causes consumers, including Plaintiff and the Class, to believe that they are paying substantially less than they actually are being charged for a room at Defendants’ hotels,” the complaint reads.

The lawsuit further states that consumers are not aware of the actual cost of the room as compared to Wyndham’s competitors, so they are “unable to make an informed purchase decision among the various competitors in the hotel room marketplace.”

Luca says this purposeful “carving out a portion of its room charge, calling it a ‘resort fee,’ and excluding it from the big bolded number that consumers use for price comparison among hotels” amounts to “the quintessential definition of consumer fraud.”

The proposed class action lawsuit states that in 2013, “resort fees” collected by hotels were estimated at $2.1 billion, twice the amount of fees collected a decade ago.

According to the complaint, a “resort fee” is a mandatory per-night charge that hotel operators add on to the nightly advertised room rate. However, Luca claims that it does not cover any additions to the room such as amenities or services.

“Instead, it is an arbitrary amount that is deducted from the room rate a hotel operator charges consumers to stay at its hotels,” the lawsuit states. “By deducting this arbitrary amount from the room rate, the hotel operator can advertise the nightly room rate as lower than it actually is.”

The lawsuit refers to this practice as “drip price” advertising, where only a part of the price is advertised and the rest of the charges are revealed later. This practice has been detailed as improper in a warning letter from the FTC, according to the complaint.

Luca goes on to say that as he and other consumers make a room night purchase on the Wyndham website, these “resort fees” are later added in to the total price under the heading “Taxes.” However, the “resort fee” is not a true tax despite the way it was represented in the charges for the room.

An itemized statement shows that the actual city and state taxes were also applied to the “resort fee” charge, according to the lawsuit.

“Given that the resort fee itself it taxed, it is clear that the fee is not a tax, but rather, part of the true cost of renting a room from Defendants,” Luca argues.

In addition to allegedly deceiving customers by excluding the resort fee in its pricing, Luca also claims that the terms of use “purport to disclaim virtually all liability connected with the booking process and renting a room” from Wyndham.

Two counts were brought forth against Wyndham including violation of New Jersey’s Consumer Fraud Act and violation of the Truth-in-Consumer Contract Warranty and Notice Act.

Luca is seeking to certify two nationwide Classes. Luca’s proposed Resort Fee Class would include all U.S. citizens who booked a Wyndham hotel room through its websites and were charged one or more resort fees. The proposed Terms of Use Class would include any U.S. citizens who booked a hotel through the website. Both proposed Classes would be bound by the statute of limitations.

On behalf of himself and the proposed Class, Luca is seeking injunctive relief for Wyndham to halt its allegedly deceptive advertising and launch a corrective advertising campaign, an injunction to remove the Terms of Use language in alleged violation of law, statutory damages, actual damages and/or treble damages, attorneys’ fees and costs and any other relief deemed fair by the court.

The plaintiff is represented by Gary F. Lynch, R. Bruce Carlson, Jamisen A. Etzel and Kevin Abramowicz of Carlson Lynch Sweet Kilpela & Carpenter, LLP; Joseph J. DePalma, Katrina Carroll and Kyle A. Shamberg of Lite DePalma Greenberg LLC; and Joseph P. Guglielmo and Erin Green Comite of Scott+Scott, Attorneys at Law, LLP.

The Wyndham Website Terms of Use Class Action Lawsuit is Thomas Luca Jr. v. Wyndham Worldwide Corporation, et al., Case No. 2:16-cv-00746, in the U.S. District Court for the Western District of Pennsylvania.

UPDATE: On Aug. 15, 2016, Wyndham filed a motion to dismiss a class action lawsuit alleging the hotel giant fails to adequately disclose its resort fee and advertises nightly room rates that do not include the per night resort fee charge.

UPDATE 2: On Sept. 14, 2016, the plaintiffs accusing Wyndham of failing to disclose hidden resort fees asked a federal court judge to deny the resort chain’s motion to dismiss a proposed class action lawsuit.

UPDATE 3: On February 15, 2017, a federal judge dismissed two of the Wyndham entities from the class action lawsuit, but has determined the case will proceed against the remaining defendants.

UPDATE 4: On June 5, 2018, a customer turned plaintiff is defending his resort fees class action claims against two Wyndham hotel companies, arguing that a recent high court decision does not invalidate his allegations.

UPDATE 5: On Oct. 15, 2018, a Wyndham Hotel guest who claims the company tricks customers into purchasing hotel rooms by hiding resort fees has asked a Pennsylvania federal court to grant Class certification in the lawsuit.

UPDATE 6: On Jan. 16, 2019, a federal judge dropped one allegation in the Wyndham resort fees class action lawsuit.

UPDATE 7: On Oct. 15, 2019, Wyndham reached a proposed settlement deal with customers who claimed that the company used “drip pricing” to conceal the full price of room booking from guests.

UPDATE 8: December 2019, the Wyndham resort fee class action settlement is now open. Click here to file a claim.