What was the settlement amount Hilton agreed to pay Texas in the lawsuit concerning 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' 2025 Franchise Disclosure Document, a lawsuit was filed against Hilton alleging violations of the Texas Deceptive Trade Practices Act concerning the disclosure of mandatory guest fees. The plaintiff alleged that Hilton did not properly include these fees in advertisements and disclosures during the booking process.\n\nIn January 2025, Hilton settled the case without admitting any fault. As part of the settlement, Hilton agreed to pay Texas $2.1 million. Additionally, Hilton committed to disclosing and displaying the total cost of guest rooms on its hotel reservation websites, ensuring third-party platforms do the same, informing customers of all material facts about bookings, refraining from misrepresentations, and complying with Texas law.\n\nThis settlement indicates the importance of transparent fee disclosure in the hospitality industry. For prospective Embassy Suites franchisees, this highlights the need to ensure full compliance with state laws regarding fee disclosure to avoid similar legal issues. It also demonstrates Hilton's willingness to settle such cases to avoid prolonged litigation and potential damage to its reputation.