Judge rejects hotel price fixing lawsuit, but it can be refiled

A class-action lawsuit alleging hotel-room price fixing is expected to be refiled by the Seattle attorneys handling the case after a Nevada judge dismissed it.

On Tuesday, U.S. District Judge Miranda Du issued a 13-page order rejecting the lawsuit filed by Seattle-based law firm Hagens Berman Sobol Shapiro against Caesars Entertainment, MGM Resorts International, Treasure Island and 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 lawsuit, filed in January, alleged the hotel operators violated the Sherman Antitrust Act for using the Rainmaker software and seeks to hold the defendants liable for repayment for guests who overpaid, according to the law firm.

In her court order, Du said the lawsuit was flawed because it failed to show that the hotel companies agreed to conspire to set price points and that hotel operators were required to accept prices the Rainmaker software recommends.

“The court therefore cannot say which pricing algorithms each hotel operator uses, making it impossible to infer that all hotel operators agreed to use the same ones,” Du wrote.

The law firm is allowed to refile the complaint within 30 days, and attorneys with the firm indicated they would do that.

Representatives of the resort companies and the Nevada Resort Association have not commented on the lawsuit, which was spurred by record-high room rates.

For the first eight months of 2023, the average daily room rate for Las Vegas hotels is $178.11, according to Las Vegas Convention and Visitors Authority statistics. In 2019, the average rate was $132.62.

Since the coronavirus pandemic, many Strip resorts have made efforts to keep hotel rates high to avoid the appearance of reductions in quality. They generally adhere to supply-and-demand philosophies, raising prices when major events are in town such as the NFL draft, Electric Daisy Carnival, National Finals Rodeo and CES.

Some of the highest hotel rates in history for Las Vegas are anticipated in November and February when the Formula One Las Vegas Grand Prix and Super Bowl are in town. Even though the price of hotel rooms for the Formula One race have steadily dropped since the middle of the year, they are still well above average prices.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on X.