Several online travel agencies have been working hand-in-hand with hotel chains to fix room rates in order to eliminate competition, according to a lawsuit filed in California by lawyer Steve Berman.
The lawyer alleges that the online travel agencies, through verbal or written deals, agree on a minimum price at which hotel rooms can be sold. Travel agencies who wish to provide real discounts to their clients end up getting shut out or blocked from hotel room inventories.
“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. The reality is that these illegal price-parity agreements mean consumers see nothing but cosmetic differences and the same prices on every site,” said Berman.
Berman want the lawsuit to be give class action status, and wants complainants to be awarded financial damages from the hotels and booking agencies who charged higher prices after promising “the best price.”
Companies named in the lawsuit include both the online travel agencies and hotel chains. The internet travel agencies named are Expedia, Travelocity.com, Sabre Holdings Corporation, Booking.com, Priceline.com and Orbitz Worldwide. Hotels named in the lawsuit are Hilton Worldwide, Starwood Hotels & Resorts Worldwide, Marriott International, Trump International Hotels and Management, LLC, Kimpton Hotel & Restaurant Group and Intercontinental Hotels.
Orbitz, in June of this year, did admit to a being part of a pricing scandal. Orbitz purposely led customers using a certain type of web browser to higher priced properties, although cheaper properties were available at the time. The company said they did this in order to maximize revenue. At the time the action was not deemed illegal; but this time the companies involved may not be so lucky.