Consumers Cheated of Billions by 6 Major Hotel Chains, Lawsuit Alleges

If you’ve booked a hotel room online since 2015, you may have paid too much. That’s the claim of a class-action lawsuit filed today against six major hotel chains for an alleged antitrust scheme.

The lawsuit alleges that Choice Hotels, Hilton, Hyatt, InterContinental, Marriott and Wyndham—and their subsidiary brands—had an anti-competitive agreement from 2015 to 2017 not to use online, branded keyword-search advertising against each other. Attorneys for Hagens Berman, the consumer-rights class-action law firm that filed the suit, estimate the scheme affected millions of people, costing them billions of dollars collectively.

Approximately 60 percent of all hotel room inventory in the United States is involved in the lawsuit, including:

  • Choice Hotels International – Comfort Inn, Comfort Inn Suites, Quality Inn, Sleep Inn and all other Choice Hotels International-branded hotels
  • Hilton – Hampton Inn, DoubleTree, Embassy Suites, Homewood Suites, Hilton Garden Inn, Waldorf Astoria and all other Hilton-branded hotels
  • Hyatt – Park Hyatt, Grand Hyatt and all other Hyatt-branded hotels
  • InterContinental – Holiday Inn, Holiday Inn Express, Candlewood Suites, Crowne Plaza, Staybridge Suites and all other InterContinental-branded hotels
  • Marriott – Sheraton, Starwood, Ritz-Carlton, Residence Inn and all other Marriott-branded hotels
  • Wyndham – Travelodge, Super 8, Knights Inn, Ramada, Days Inn, Howard Johnson’s and all other Wyndham-branded hotels

“Instead of honest competition, these hotel chains chose to cheat the system and deceive their customers,” says Steve Berman, managing partner of Hagens Berman, in a press release. “We believe consumers deserve payback from defendants for their deceptive advertising practices.”

A Marriott spokesperson reached on Monday said, “We are reviewing the complaint now.  At this time we have no further comment.”

The Hotel Overpricing Scheme

The lawsuit states that each hotel defendant agreed not to use certain online advertising methods to compete for consumers. The agreement prevented competitors from bidding for online advertising that uses competitors’ brand names. In a press release announcing the suit, Hagens Berman cited the example of Hilton Hotels & Resorts declining to bid on keywords that would allow its ads to appear in response to internet searches for Hyatt Hotels.

This made it more difficult for consumers to get information about competing hotels, according to the press release, and to compare and contrast competitive information, such as price and quality.

“This leaves hotel chains with free reign to keep prices high, with no threat of consumers seeing competing ads,” the press release states.

The lawsuit alleges that these hotel companies also pressured online travel agencies (such as Priceline and Expedia) to keep them from bidding on branded keywords as well, making it less likely consumers would see the choices available on those online travel agency websites.

The lawsuit was filed in U.S. District Court for the Northern District of Illinois. It seeks reimbursement for consumers who paid high prices for hotel rooms and an injunction from the court to force the hotel chains to end “deceptive marketing practices.”

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