HOTEL

Las Vegas Strip hotels conspired to raise prices, lawsuit says

Hotels on the Las Vegas Strip used a “revenue management platform” to set illegally high room rates and undercut competition, a <a href=class action lawsuit says.” title=”Hotels on the Las Vegas Strip used a “revenue management platform” to set illegally high room rates and undercut competition, a class action lawsuit says.” loading=”lazy”/

Hotels on the Las Vegas Strip used a “revenue management platform” to set illegally high room rates and undercut competition, a class action lawsuit says.

Visitors who’ve rented rooms on the Las Vegas Strip within the last four years have filed a class action lawsuit against four of the largest gaming and hospitality companies in the city, saying that the hotels engaged in a price-fixing scheme to inflate room rates, according to lawyers.

The lawsuit, filed on Jan. 25, says that 90% of hotels on the strip use a revenue management platform called Rainmaker, which has an algorithm that recommends future, room-specific prices to hotels.

Rather than encouraging hotels to fill all of their rooms, Rainmaker focuses on helping hotels maximize their profits at the expense of consumers, the lawsuit says.

“In a competitive market, any empty hotel room is lost revenue, so a hotel operator would try to fill each hotel room by granting concessions or lowering prices,” the lawsuit says. “By contrast, on Rainmaker Group’s recommendations and as an integral part of the conspiracy, Hotel Operators kept prices high and some rooms empty, knowing their co-conspirators would not undercut these supracompetitive prices.”

A spokesperson for Cendyn Group, Rainmaker’s parent company, declined to comment.

Unlike sites such as Expedia and TripAdvisor, which display current pricing and allow consumers to compare rates but don’t influence how hotels set their prices, Rainmaker uses its own algorithms to recommend future prices to hotels, and all the hotels that use it adopt the “same future pricing strategy,” Steve Berman, managing partner of Hagens Berman, the law firm seeking to represent consumers

Read the rest
Read more