What was the settlement amount Hilton agreed to pay in the Nebraska lawsuit concerning Embassy Suites?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
ng misrepresentations or misleading customers, and comply with Texas law.
State of Nebraska v. Hilton Domestic Operating Company Inc. (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 the 2025 Embassy Suites Franchise Disclosure Document, Hilton Domestic Operating Company Inc. settled a lawsuit with the State of Nebraska in February 2024 without admitting any fault. The lawsuit, filed on July 23, 2019, alleged violations of the Nebraska Consumer Protection Act and Uniform Deceptive Trade Practices Act related to the disclosure of mandatory guest fees. These fees, also known as resort fees, urban fees, or destination fees, were allegedly not properly disclosed to consumers during the booking process. The plaintiff sought an injunction, restitution for consumers, civil penalties, and attorneys' fees and costs.
Under the settlement agreement, Hilton agreed to pay $300,000 to the State of Nebraska. In addition to the monetary payment, Hilton also agreed to clearly disclose all mandatory fees and the total price for a booking. This means that Embassy Suites franchisees must ensure that all mandatory guest fees are transparently communicated to customers during the booking process, both online and via telephone.
For a prospective Embassy Suites franchisee, this litigation and settlement highlight the importance of adhering to consumer protection laws and ensuring transparent pricing practices. Failure to properly disclose mandatory fees could lead to similar lawsuits and financial penalties. It also underscores the need to stay updated on evolving regulations regarding fee disclosures in the hospitality industry. Franchisees should ensure their booking processes and advertising materials comply with these requirements to avoid potential legal issues and maintain customer trust.