CoStar, Hilton fight back against price-fixing lawsuit

Plaintiffs claim data was wrongly shared to keep room costs high

CoStar, Hotels Move to Toss Room Pricing Lawsuit
CoStar's Andy Florance (CoStar via YouTube, Getty)

CoStar Group and six other defendants filed a motion to dismiss a class-action lawsuit filed in Seattle federal court, Reuters reported. The defendants include prominent hotel operators, such as Hilton, Hyatt and Marriott.

The lawsuit alleged the defendants improperly shared data that resulted in artificially high prices for hotel rooms. The defendants claim there’s no evidence showing a conspiracy to fix prices.

CoStar’s Smith Travel Research reports are at the heart of the lawsuit. CoStar and the hotels in the case say the reports feature historical data on revenue and room availability.

The plaintiffs, a group of renters seeking class-action status, allege defendant hotels shared prices, supply and future plans. That allowed them to use rivals’ strategic information to pump up prices in markets including Washington, D.C., San Francisco, New York, Chicago, Boston and Austin, according to the suit.

The plaintiffs said the data is the “essential ‘fuel’ propelling pricing algorithms towards the ultimate goal of charging higher prices.”

In the filing to dismiss, the defendants referred to the lawsuit as “fanciful.” They also said the lawsuit is an attempt to follow in the footsteps of other antitrust lawsuits that align “algorithmic pricing” with price-fixing, which the defendants say the data in dispute doesn’t involve.

None of the defendants commented to Reuters about the most recent motion, nor did the legal team representing the plaintiffs.

In Las Vegas, several major hotels were accused last year of sharing information with a revenue management platform in order to illegally coordinate on room pricing. 

Earlier this month, the judge dismissed the case, saying that the evidence failed to show any price-fixing agreement.

Holden Walter-Warner

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