When did the parties settle the case between the State of Texas and Hilton regarding Embassy Suites?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
C. CONCLUDED ACTIONS – INVOLVING US OR HILTON (F/K/A HHC, HWI, AND PARK)**
State of Texas v. Hilton Domestic Operating Company Inc. (District Court of Collin County, Texas, CAUSE NO. 296-02595-2023).
On May 23, 2023, the plaintiff filed suit against Hilton alleging the violations of the Texas 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 from the daily room rate. 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 have 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 were actually covered by the mandatory guest fee. Plaintiff sought an injunction, restitution for Texas consumers, civil penalties, attorneys' fees and costs. In January 2025, the parties settled the case. Without admitting any fault, Hilton agreed to pay Texas $2.1 million and to disclose, display, and sort guest rooms by their total cost on its hotel reservation websites, require third party platforms to do the same, inform customers of all material facts about bookings, refrain from mak
Source: Item 3 — LITIGATION (FDD pages 19–22)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, a case between the State of Texas and Hilton Domestic Operating Company Inc. was settled in January 2025. The suit, filed on May 23, 2023, alleged violations of the Texas Deceptive Trade Practices Act concerning the disclosure of mandatory guest fees.
The core of the dispute revolved around how Hilton presented mandatory guest fees to consumers, particularly during the booking process. The plaintiff, the State of Texas, claimed that Hilton did not adequately include these fees in initial advertisements and disclosures, especially during telephone bookings, and only revealed them late in the online booking process. Additionally, the state alleged that Hilton misrepresented the purpose of these fees, suggesting they covered amenities that were either already free, bundled into the room rate, or advertised as free but actually paid for by the mandatory fee.
To resolve the matter, Hilton agreed to pay Texas $2.1 million without admitting any fault. Furthermore, Hilton committed to several changes in its business practices, including disclosing and displaying the total cost of guest rooms on its reservation websites, ensuring third-party platforms do the same, providing customers with all material facts about bookings, refraining from misrepresentations, and complying with Texas law. This settlement indicates the importance of transparent fee disclosure in the hospitality industry and the potential legal and financial consequences of failing to do so.