Six Major Hotel Brands Named in Price-Fixing Antitrust Suit

By Jordan Bradley

A class action antitrust lawsuit was filed in a San Francisco federal court on April 26 alleging that six major hotel brands used AI-powered software to inflate room rates.

The lawsuit names Hilton Worldwide Holdings Inc., Wyndham Hotels & Resorts, Inc., Four Seasons hotels and Resorts US Inc., OmniHotels & Resorts Inc., Hyatt Hotel Corporation and Choice Hotels International Inc., as well as Integrated Decisions and Systems, Inc. (IDeaS) of Minnesota and its parent company, SAS Institute, Inc. The plaintiffs are eight individual consumers who have stayed at one of the named hotel brand properties at least once in the last four years, according to CBS News.

The complaint alleges that the six hotel brands used software called G3 RMS created by IDeaS and SAS Institute that is billed as a revenue management system, but it has been used by the companies as a price-fixing tool across several major markets, including San Francisco, Oakland and Fremont, California Metropolitan areas.

According to the complaint, the defendants allegedly have agreed to supply IDeaS “with proprietary, non-public, and sensitive information about their room availability, demand, and pricing. The information is provided continuously, in real time, so that IDeaS always knows what all of its client-competitors have available in a given market,” according to CBS News.

The software then provides pricing recommendations updated at least daily that are tailored to each client and designed to maximize revenue, the suit alleges. According to the complaint, these recommendations from the G3 RMS software are frequently adopted by the hotel operators.

The plaintiffs allege that “by sending their sensitive confidential pricing and occupancy information to a third party to process, analyze, and develop supra-competitive prices, the [defendants] are able to achieve the same result as if they secretly met in a back room and exchanged their information and agreed to a supra-competitive price.”

Representatives from all six hotel companies named in the suit did not reply to a USAE request for comment by press deadline.