A suit was recently filed against a number of major travel deal sites and major hotel chains, claiming price fixing. The lawsuit is seeking class action position. The suit claims such websites, such as Travelocity and Orbitz, are getting hotels to set price floors to keep them from negotiating lower with customers. Article source:

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Possible price fixing at travel online websites

According to Daily Finance, a case has been filed against some of the largest web sites for travel deal and hotels that they book rooms at, alleging that the travel websites are not offering consumers the best price. The suit claims they're running a price-fixing scheme to keep the public from getting the real best hotel and travel deal feasible.

On the Huffington Post, you can see the lawsuit, and it talks about a lot of important companies such as Starwood Hotels, Marriott Hotels, Trump Hotels, Intercontinental Hotels, and Kimpton Hotels. It also names Travelocity, Hotels.com, Orbitz and Expedia in the lawsuit.

The suit alleges the online websites got hotel chains to institute “price maintenance agreements,” essentially a price floor for the rates hotels could offer rooms through 3rd party vendors.

Requiring prices to stay high

With the deals, the travel sites get the minimum prices for rooms. That means that the hotel cannot sell any room for under the agreed amount, which means no negotiating lower rates for any person.

Orbitz found through analytics that Mac consumers spent more on hotels than PC consumers, so it was found to be giving higher quotes to Mac consumers than PC consumers, according to the Wall Street Journal. This is not the first time accusations have been made against the businesses.

The sites are also known to tailor offers by zip code, according to SmartMoney, though that is not anything out of the ordinary; most online retailers track “cookies,” bits of code contained in an individual's internet browser, to gain information about their browsing habits, such as location. This lets advertisers tailor ads to appeal better to each person.

Deciding whether or not to get travel deal

Are travel deal sites actually ripping people off or trying to keep people from getting as good a deal as they could? That's up for controversy. For one, a person that gets hotel deals from say, Orbitz or Hotels.com, is still getting a room for less than they would otherwise. Also, according to a post on CNBC by Darren Booth, who worked in the hospitality industry for a while, hotels negotiate a price with 3rd party vendors for blocks of rooms, but actively try to not offer rooms for more than competitors, as that would chase business away.

There are some private sale websites that only offer hotel rooms and resort stays instead of also offering airfare, and those online websites generally have better rates than other discount travel sites, according to USA Today.

Daily Finance
Wall Street Journal