Some big name hotel companies and online travel agencies are facing a lawsuit, accusing them of price fixing. The lawsuit filed in U.S. District Court in San Francisco alleges that Hilton Hotels, Sheraton Hotels & Resorts, Marriott International and others conspired with travel sites like Expedia, Travelocity and Priceline.com subsidiary Booking.com to fix hotel prices around the country.
The suit says that the hotels got together with the online sites to create resale price maintenance (RPM) agreements to beat out smaller sites that sold hotel rooms at cheaper prices.
Several travel websites claim to pass low rates on to consumers by purchasing blocks of unsold rooms and reselling them to the public at a higher price, or by charging the hotel a fee for the service of booking rooms.
Travel websites claim that they offer travelers low rates after they purchase blocks of unsold hotel rooms. However, according to the suit, the hotels set minimum room rates that travel sites could show to consumers. The hotels agreed to the fixed prices because they didn't want to lose the business that the online travel websites bring.
Nakita Turik from Chicago and Eric Balk of Cedar Falls, Iowa are being represented by Seattle law firm Hagens Berman, which often handles class-action consumer suits. The men used online travel sites to book hotels over the past two years and they're claiming that the sites broke antitrust laws. They claim that consumers would have paid much less for hotel rooms if this price-fixing scheme didn't exist.
"The large online travel sites, working with hotel chains, have created the illusion that savvy consumers can spend time researching hotel rates online to find good deals," said Steve Berman, managing partner and co-founder of Seattle-based law firm Hagens Berman, as quoted by the Los Angeles Times. "The reality is that these illegal price-parity agreements mean consumers see nothing but cosmetic differences and the same prices on every site."
Hagens Berman is seeking unspecificed damages and legal fees from the hotels and travel sites. They also want the court to set an injunction so hotels and websites can no longer create fixed prices.
The hotel companies and travel sites have not commented on the lawsuit.
This article is copyrighted by Travelers Today, the travel news leader
