What specific Texas law was Hilton alleged to have violated in the lawsuit related to 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 lawsuit was filed against Hilton Domestic Operating Company Inc. alleging violations of the Texas Deceptive Trade Practices Act. The allegations centered around the disclosure of mandatory guest fees to consumers. These fees are charged for certain amenities separately from the daily room rate.
The lawsuit claimed that Hilton failed to include these mandatory guest fees in advertisements and disclosures made to consumers during the telephone booking process. Additionally, the suit alleged that Hilton improperly disclosed these fees only at the end of the online booking process. The plaintiff also alleged misrepresentation when hotels indicated that mandatory guest fees covered amenities that were routinely provided at no cost, bundled in the room rate, or advertised as free.
The plaintiff sought an injunction, restitution for Texas consumers, civil penalties, attorneys' fees, and costs. In January 2025, the parties reached a settlement where Hilton agreed to pay Texas $2.1 million without admitting any fault. Hilton also agreed 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 making misrepresentations or misleading customers, and comply with Texas law.