CoStar, luxury hotels defeat room rental price gouging lawsuit

By Mike Scarcella

Sept 2 (Reuters) - Commercial real estate data and analytics company CoStar CSGP.O and a group of high-end hotels have convinced a U.S. judge to dismiss a consumer lawsuit claiming they improperly shared revenue and other data to keep room prices artificially high.

Seattle-based U.S. District Judge Robert Lasnik on Friday said the consumers had not presented enough evidence for now to show that CoStar and six hotel operators, including Hilton HLT.N, Hyatt H.N and Marriott MAR.O, agreed to illegally share information on prices.

The consumers had alleged that hotels were violating antitrust law by sharing prices, room supply data and future plans, allowing them to inflate prices in Washington, San Francisco, New York, Nashville, Austin and other cities. Lasnik's order gave the plaintiffs a chance to amend their lawsuit and try to persuade him a second time.

CoStar general counsel Gene Boxer in a statement said the company welcomed the decision.

“This lawsuit has never made any sense, and dismissal of the entire case is and was inevitable,” Boxer said. “We look forward to the case checking out for good shortly.”

Hilton, Hyatt and Marriott did not immediately respond to requests for comment, and neither did a lead attorney for the plaintiffs.

CoStar and the hotels have denied any wrongdoing.

The lawsuit, filed last year, said hotels were using CoStar’s Smith Travel Research (STR) reports, which advertise “performance benchmarking and comparative analytics” for the hotel industry, to coordinate on room pricing.

CoStar and the hotels in court filings defended the reports, which they said feature historical data on room availability and revenue.

Lasnik said the plaintiffs were missing a “key ingredient” in their lawsuit. The consumers, he said, had not shown that the actual price of a hotel was either a required input into Smith Travel Reports, or an output from the reports to the hotels.

The judge’s order was the latest setback for plaintiffs suing over hotel room prices. A U.S. appeals court last month ruled for a group of Las Vegas hotels that were accused of conspiring to overcharge guests.

The case is Jeanette Portillo et al v. CoStar Group et al, U.S. District Court for the Western District of Washington, No. 2:24-cv-00229.

For plaintiffs: Steve Berman of Hagens Berman Sobol Shapiro

For CoStar: Lawrence Buterman of Latham & Watkins

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