Expedia, Starwood, Marriott Named in Price-Fixing Lawsuit

Discussion in 'General Discussion | Travel' started by LAXjunkie415, Aug 20, 2012.  |  Print Topic

  1. LAXjunkie415

    LAXjunkie415 Gold Member

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    Saw on Bloomberg Mobile today. Very interesting...

    Link to article:http://washpost.bloomberg.com/Story?docId=1376-M92KY36S973101-64FU0GU7088BFP98BTVGLB7022

    Expedia Inc., Starwood Hotels (HOT) & Resorts Worldwide Inc. and Marriott International Inc. (MAR), are among a group of online travel sites and hotels accused of conspiring to fix prices for hotel rooms.
    The sites and hotels are named in a complaint filed today in federal court in San Francisco on behalf of hotel-room purchasers nationwide. The plaintiffs, one a resident of Chicago, the other of Cedar Falls, Iowa, seek unspecified damages and a court order to end the alleged price fixing.
    “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,” Steve Berman, a lawyer for the plaintiffs, said in a statement. “The reality is that these illegal price-parity agreements mean consumers see nothing but cosmetic differences and the same prices on every site.”
    The large online travel sites, including Expedia, Travelocity, a unit of Sabre Holdings Corp., and Booking.com, a unit of Priceline.com Inc. (PCLN), extracted so-called resale price maintenance agreements from the hotel chains, according to the statement.
    The travel sites sought the agreements to prevent the hotels from selling blocks of unsold rooms at the last minute to third-party wholesalers that sell them to smaller, price cutting online retailers, according to the statement. The agreements set a fixed price below which the hotels can’t sell the rooms to wholesalers, according the statement.
    Representatives of the travel sites and the hotels didn’t immediately return calls for comment on the allegations.
    The case is Turik v. Expedia, 12-4365, U.S. District Court, Northern District of California (San Francisco.)
    To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net.
    To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.
    rwoman, MX, LIH Prem and 4 others like this.
  2. tunes

    tunes Silver Member

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    I'm confused, I don't understand the basis here. They are mad because the 'cheap' sites are showing the same price as the hotel sites? or because hotwire and the likes aren't getting rooms so they cant get super cheap rooms?
  3. MX

    MX Gold Member

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    It's generally illegal for competitors to agree on pricing, set minimum prices, or otherwise subvert a competitive market.
  4. MilePointInformed
    Original Member

    MilePointInformed Silver Member

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    This really slowly came about after September 11th 2001 when hotels got fed up with third party sites undercutting them
    Price integrity could not be maintained as one site would sell a room for 99 dollars while Starwood might be trying to get 299 dollars a night on their website
    As a result the hotel companies started making demands of the third party sellers if they wanted room inventory/ access to their properties.Its my guess the hotel companies went down the wrong path trying to have the upper hand in pricing
    Let us all not forget how the hotelc ompanies refused point and stay credits for some of the same reasoning

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