Las Vegas Strip hotels colluded, inflated room rates, lawsuit claims
Published in Business News
A class-action lawsuit filed Wednesday alleges hotel operators on the Las Vegas Strip colluded to artificially inflate the prices of hotel rooms to above competitive levels.
Attorneys with Seattle-based law firm Hagens Berman say a revenue management platform employed by a majority of Strip hotels uses real-time pricing and supply information data from competitors on the platform to design rate recommendations that “unlawfully maximize profits for its hotel operator users.”
Operators price rooms independently in a competitive market. However, information shared and algorithms set through the platform Rainmaker displaced normal competitive pricing and led to increased room prices, according to the suit filed in the U.S. District Court.
The platform’s algorithm was set to raise profits for the hotel operators without driving occupancy up and the supply down, attorneys say.
“Our antitrust attorneys have uncovered what appears to be an unlawful agreement in which Rainmaker collects and shares data between Vegas hotel competitors to unlawfully raise prices of hotel rooms,” Steve Berman, managing partner at Hagens Berman, said in a news release. “What happens in Vegas will no longer stay in Vegas. We intend to expose the under-the-table deals perpetrated by these Vegas hotels, and we intend to hold them accountable.”
The lawsuit names Caesars Entertainment, MGM Resorts International, Treasure Island and Wynn Resorts Holdings as defendants and points to the companies’ dominant market share of hotels on the Strip, with the operators named controlling about 20 resorts. It also names Cendyn Group, a Boca Raton, Florida-based hospitality data analytics and software firm, and its subsidiary Rainmaker Group Unlimited, based in Georgia.
The lawsuit claims hotel operators violated the Sherman Antitrust Act for using the Rainmaker software and wants to hold the defendants liable for repayment for guests who overpaid, according to the news release. Lawyers are seeking more plaintiffs.
MGM Resorts and the Nevada Resort Association declined to comment.
Caesars, Treasure Island, Wynn Resorts and Cendyn Group did not immediately return requests for comment.
Record-high room rates
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