Price-fixing lawsuit against Strip hotels tossed out

A class-action lawsuit alleging hotel room price fixing has been thrown out, handing a win to the Strip hospitality companies accused of antitrust behavior.

U.S. District Chief Judge Miranda Du issued an 18-page order Wednesday dismissing an amended lawsuit from Seattle-based firm Hagens Berman Sobol Shapiro against Caesars Entertainment, Treasure Island, JC Hospitality, Blackstone Inc., Wynn Resorts Holdings and Cendyn Group, a Boca Raton, Florida-based hospitality data analytics and software firm, and its subsidiary, Rainmaker Group Unlimited, based in Georgia.

The suit was first filed in the District of Nevada in January 2023. It alleged the hotel operators violated the Sherman Antitrust Act for using the Rainmaker software — made by Cendyn — and sought to hold the defendants liable for repayment for guests who overpaid.

The software suite used algorithms that recommend daily hotel room prices, forecast group demand and rate-shop. Experts say such software use is common. The plaintiffs argued the widespread use of Rainmaker amounted to an unspoken conspiracy to set prices.

Du rejected the suit in October, saying the lawsuit was flawed because it failed to show the hotel companies agreed to conspire to set price points. It allowed the plaintiffs to refile an amended complaint. Still, they did not sway the judge with an argument that suggested a plausible, unsaid but implied agreement between the hotel operators. She pointed out that hotels are not required to, and often don’t, accept the pricing recommendations from the software.

“Plaintiffs’ allegations that Defendants entered into a tacit agreement to fix prices still have not crossed the line from conceivable to plausible despite the multitude of additional allegations” in the first amended complaint, according to the court’s dismissal. “This case remains a relatively novel antitrust theory premised on algorithmic pricing going in search of factual allegations that could support it.”

McKenna Ross is a corps member with Report for America, a national service program that places journalists into local newsrooms. Contact her at mross@reviewjournal.com. Follow @mckenna_ross_ on X.