A California hotel operator has filed suit against against Expedia, alleging that the online travel giant buys search and social media advertising for properties not listed on its sites and then attempts to get interested customers to book with one of its partner hotels instead.
The proposed class action suit, filed in U.S. District Court in Northern California, accuses Expedia off false advertising, unfair competition, and “bait and switch” tactics. The complaint was filed by the operator of the Buckeye Tree Lodge and Sequoia Village Inn in Three Rivers, Calif., outside of Sequoia and Kings Canyon National Park.
An Expedia spokesperson told GeekWire, “We value our relationships with hoteliers and take allegations such as these seriously. We are investigating the allegations and whether our standard practices were followed. However, the value of our marketplace as a fair and effective way to connect hoteliers and travelers is our number one priority.”
The complaint says Expedia, which is headquartered in Bellevue, Wash., lures customers with online deals for hotels that are not bookable through Expedia.com or its other sites. When a customer clicks these deals and tries to make a reservation through Expedia, the site says there is no vacancy and suggests alternative hotels in the area, the complaint alleges.
“Expedia’s website falsely shows that there is no availability at the hotel, but then pushes the consumers to ‘deals’ at Expedia’s nearby member hotels, who pay Expedia a fee for every room booked through its website,” the complaint says. “Expedia’s deceit is brazen. Expedia posts fake telephone numbers for Buckeye Tree Lodge and other Class Member hotels to divert callers to Expedia’s own operators, who then try to book the consumers at Expedia member hotels.”
This morning, GeekWire searched Buckeye Tree Lodge and the first result was an Expedia ad for a $50 coupon at the hotel. The phone number listed went to Expedia Central Reservations. GeekWire called twice and each time the line disconnected without explanation after the operator spent a few minutes trying to make a reservation.
“What Expedia and its affiliate networks are doing is pretty outrageous here,” said Elizabeth Mitchell, a lawyer from Patterson Law Group which represents plaintiffs, speaking via phone this morning. “They’re doing a classic bait and switch.”
The plaintiffs say the issue qualifies for class action status because there are more than 100 putative class members affected by these tactics and the amount in controversy exceeds $5 million.
Mitchell’s team targeted its research to hotels that are not Expedia affiliates in the Bay Area. However, she says, the proposed class action suit would include all hotels that aren’t bookable on Expedia properties.
“Expedia and Hotels.com and Orbitz and Travago and the other members under that umbrella have marketing contracts with some hotels and not others,” she said. “So the ones they have contracts with pay them a fee to book their hotel rooms. The ones that they don’t have a contract to book with, they’re falsely saying they do to consumers. These are potentially thousands and thousands of hotels nationwide.”
Here’s a copy of the full complaint.