Substandard treatment of guests can spark a negative social media campaign which can produce catastrophic business results. A recent case offers a stark reminder of this truism.
Beginning in 2022, members of an activist group launched a campaign via the internet portraying a hotel, lounge and casino complex (hereafter “the hotel”) as racist due to their treatment of Native Americans. The posts went viral and encouraged cancellation of reservations and boycotting of the hotel. The facility had a contract with Expedia entitling the hotel to a listing and promotion on Expedia’s website in exchange for commissions. The protesters contacted Expedia to demand the hotel be delisted.
Expedia did deactivate the hotel. In response, it complained the website did not undertake a “meaningful investigation” or permit an opportunity for the hotel to respond. Expedia repeatedly told the hotel it would reinstate the facility but never did, and then ceased communications. The result was an 80 percent drop in the hotel’s bookings, including cancellations by such lucrative customers as conference hosts, tour operators and sports teams.
The hotel was sued by the United States for violating the Civil Rights Act. The hotel denied wrongdoing but entered a consent decree agreeing to refrain from illegal discrimination, permit a government monitor, institute anti-discrimination training, prepare a marketing outreach plan and issue a statement of apology.
To address its losses, the hotel sued Expedia1 claiming breach of contract. As with all contractual relationships, the terms of the agreement control the rights of the parties. A provision in the contract read, “In Expedia’s sole discretion, it can refuse to offer, display, or list for booking any of the hotel’s rooms.” The hotel argued that Expedia nonetheless violated an implied duty, imposed by law on all contracting parties, of good faith and fair dealing. The court acknowledged the implied obligation but said that law cannot impose new requirements not stated in the contract. The parties’ written agreement contained no provision mandating that Expedia conduct an investigation. Case dismissed.
The lessons are several: Don’t underestimate the reach of comments on social media. Read contracts carefully before signing. Attempt to renegotiate unacceptable terms. If the other party won’t budge, weigh the pros and cons. Above all, treat everyone respectfully regardless of race or other protected class (color, religion, national origin, gender and disability).
1 Retsel Corp. d/b/a Grand Gateway Hotel and Cheers Sports Lounge and Casino v. Expedia, Inc., 2026 WL 91599 (W.D. Wash., 1/13/2026).
This article was originally published in the February/March edition of Hotel Management magazine. Subscribe here.