IANAL. But IMHO, while my response is it depends, it is completely legitimate in your case.

First - the Watson Hotel does charge $20 each day per room. So the fee is assessed not because you use Priceline, but to every guest.

Second - Priceline has an affirmative defense that excuses Priceline for liability. Specifically, Priceline does not know which hotel will be booked in advance. Also, it has disclosed the potential fee. So Priceline has exercised reasonable procedures to warn consumers regarding the uncertainty.

(FWIW - this won't work with Express Deal because Priceline is aware in advance that which hotel will be booked.)