LXR Luxury Resorts last week agreed to pay $2.3 million to settle a five-year investigation by the state of Florida over veiled surcharges added to traveler lodging bills at 16 Wyndham properties.
Under the agreement, LXR is obligated to fully disclose all charges up front at the time of reservation, which will mitigate traveler difficulty when settling bills, aid travel managers in budgeting and promote transparency. "Any time a buyer can be made more fully aware of all the expenses related to his purchase, he or she has the opportunity to make a better business decision," said John Asselta, senior consultant for HRG Consulting North America. "I don't know how much it will negatively impact a choice of property, but it will definitely be able to help in budgeting. Knowing the expenses that are associated is good business, it's ethical and it's the way it should be."
The aim of the litigation was to expose clandestine pricing and compel hoteliers to eschew deceptive pricing. "Customers have a right to know what they are buying," said Florida Attorney General Charlie Crist. "This settlement provides hotel guests with the opportunity to make an informed choice before they reserve a room." In addition, third-party Web sites that sell rooms on Wyndham's behalf, such as Orbitz and Travelocity, will be required to reveal automatic charges at the time of purchase.
The settlement follows similar agreements made last year in Florida by Marriott International and Starwood Hotels & Resorts, which prompted Marriott in March to begin displaying all charges and surcharges to travelers before they booked a stay at more than 2,700 properties worldwide, through what it called total trip pricing
(BTN, April 3).
LXR, a collection of properties owned by the Blackstone Group, bought Wyndham International last summer, before eventually selling the brand to Cendant Corp., but still retained ownership of some of the hotels.
Monetarily, LXR will spread out $560,000 among those guests that were wronged by the hidden charges and be responsible for anteing up $1.8 million toward investigation and litigation fees.
LXR could not be reached for comment.