What did the plaintiff in the Texas lawsuit seek from Hilton regarding Embassy Suites By Hilton?
Embassy_Suites_By_Hilton 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 18–22)
What This Means (2025 FDD)
According to the 2025 Franchise Disclosure Document, in a lawsuit filed by the State of Texas against Hilton Domestic Operating Company Inc., the plaintiff alleged violations of the Texas Deceptive Trade Practices Act related to the disclosure of mandatory guest fees. These fees are charged for amenities separately from the daily room rate. The lawsuit specifically targeted how Hilton disclosed these fees to consumers during the booking process. The core of the complaint was that Hilton allegedly failed to include these mandatory guest fees in initial advertisements and disclosures made during telephone bookings. Furthermore, the plaintiff contended that Hilton improperly disclosed these fees only at the end of the online booking process, potentially misleading consumers about the total cost of their stay. The lawsuit also highlighted instances of alleged misrepresentation, where hotels indicated that mandatory guest fees covered certain amenities when those amenities were either routinely provided at no cost, bundled in the room rate, or advertised as free.
The State of Texas sought several remedies from Hilton to address these alleged deceptive practices. These included an injunction to prevent Hilton from continuing the practices, restitution for Texas consumers who had been affected by the alleged improper disclosures, civil penalties for the violations of the Texas Deceptive Trade Practices Act, and coverage of the attorneys' fees and costs associated with the lawsuit. The aim was to ensure that Hilton provided transparent and accurate information about all mandatory fees to consumers in Texas, preventing potential deception and ensuring fair trade practices.
The case was settled in January 2025, with Hilton agreeing to several terms without admitting any fault. Hilton agreed to pay Texas $2.1 million and to implement changes in how it discloses, displays, and sorts guest rooms by their total cost on its hotel reservation websites. Hilton also committed to requiring third-party platforms to do the same, ensuring consistent disclosure across all booking channels. Additionally, Hilton agreed to inform customers of all material facts about bookings, refrain from making misrepresentations or misleading customers, and comply with Texas law. This settlement indicates a proactive approach by Texas to protect consumers from deceptive trade practices in the hospitality industry, and it highlights the importance of transparent fee disclosure for hotel franchises like Embassy Suites By Hilton.