There is a massive hotel price fixing scheme between hotels and online travel agencies, claims a class action lawsuit.
When you shop for cheap hotel deals, you're likely to shop rates at one of the major travel websites like Expedia, Travelocity, or Priceline. When you visit one of these sites, you likely operate under the assumption that you're looking at independently negotiated deals.
However, that may not be the case. A budding class action lawsuit alleges that hotels and these online travel agencies were in cahoots in fixing the prices for the rooms.
The federal hotel price fixing lawsuit was filed in San Francisco and claims that Hilton Hotels, Sheraton Hotels & Resorts, Marriott International and others conspired with Expedia, Travelocity, and a subsidiary of Priceline, among others, to fix hotel prices across the country, reports the Los Angeles Times.
The lawsuit says that the hotels and the online travel agencies prearranged a price customers would pay for the rooms. So instead of independently negotiating room rates with the hotels by purchasing a block of rooms, as is commonly thought, the hotels and travel agencies allegedly just worked together to set a uniform rate, reports the Times. So the idea that you could shop different, and better, rates on these online sites is claimed to be just an illusion as the hotels and online agencies already predetermined what you would pay.
The lawsuit is seeking an injunction to prevent the hotels and travel sites from continuing the alleged hotel price fixing scheme. The lawsuit also makes a claim for unspecified damages. This would likely include the difference between what a consumer would have paid in legitimately negotiated hotel rates versus the fixed rates they allegedly paid.