When did Hilton enter into a settlement agreement with the State of Nebraska regarding Embassy Suites?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
(District Court of Lancaster County, Nebraska, Case No. D02CI190002366).
On July 23, 2019, the plaintiff filed suit against Hilton alleging the violations of the Nebraska Consumer Protection Act and Uniform Deceptive Trade Practices Act in relation to how mandatory guest fees are disclosed to consumers. Mandatory guest fees are amounts that hotels charge guests for certain amenities separate and apart from the daily room rate, which may be called by
different names such as resort fees, urban fees, or destination fees. Plaintiff alleged that Hilton failed to include mandatory guest fees in advertisements and disclosures made to consumers during the telephone booking process, and improperly disclosed these fees only at the end of the online booking process. Plaintiff also alleged misrepresentation in instances when hotels indicated that mandatory guest fees pay for certain amenities when those amenities were routinely provided at no cost or bundled in the room rate, and/or when amenities were advertised as free but actually covered by the mandatory guest fee. Plaintiff sought an injunction, restitution for consumers, civil penalties, and attorneys' fees and costs. In February 2024, without admitting any fault, Hilton entered into a settlement agreement with Plaintiff and agreed to pay $300,000
Source: Item 3 — LITIGATION (FDD pages 19–22)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, Hilton Domestic Operating Company Inc. entered into a settlement agreement with the State of Nebraska in February 2024. The lawsuit, filed on July 23, 2019, by the State of Nebraska, alleged violations of the Nebraska Consumer Protection Act and the Uniform Deceptive Trade Practices Act. The allegations concerned the disclosure of mandatory guest fees, also known as resort fees, urban fees, or destination fees.
The core of the complaint was that Hilton allegedly failed to include these mandatory guest fees in advertisements and disclosures during telephone bookings and improperly disclosed them only at the end of the online booking process. The State of Nebraska also claimed misrepresentation when hotels indicated that these fees covered certain amenities that were either routinely provided at no cost, bundled in the room rate, or advertised as free but actually covered by the mandatory guest fee.
As part of the settlement, Hilton, without admitting any fault, agreed to pay $300,000 and to clearly disclose all mandatory fees and the total price for bookings. This settlement highlights the importance of transparent pricing and full disclosure of all fees to consumers, which is a critical aspect of maintaining trust and avoiding legal issues in the hospitality industry. For a prospective Embassy Suites franchisee, this underscores the need to ensure that all fee disclosures are clear, accurate, and compliant with applicable consumer protection laws to avoid similar legal challenges.