The attorney general of Connecticut must be living in a cave.
Last Thursday, Connecticut Attorney General Richard Blumenthal announced La Quinta (LQ Management LLC) agreed to cease daily call-arounds on a national level.
Blumenthal claims: “Such call-arounds interfere with the competitive market—potentially fixing prices and increasing costs for consumers. My office is investigating several national hotel chains that engaged in this practice. While my investigation continues, we expect that additional hotel companies will follow La Quinta’s lead and cease anticompetitive call-arounds. We will take legal action as well, if necessary.”
According to the documents, La Quinta and its competitors used shared information to stabilize or raise rates, and the exchange may have resulted in violations of the state’s antitrust act.
- Read the agreement by the Connecticut Attorney General, LQ Management LLC and La Quinta Franchising LLC.
Looks like a slippery slope for Connecticut. What hotel companies don’t conduct call-arounds? And how does Connecticut plan to address all forms of rate and occupancy information gathering?
The state’s press office did not return a call as of press time.
Common practice
As some of our readers commented on yesterday’s “5 things to know,” calling around is standard practice.
What is puzzling is that La Quinta agreed to stop the calls. Perhaps it’s easier to give in than to argue over such a seemingly random accusation?
La Quinta did not respond to a request for comment by press time.
The old-fashioned methods are still around and widespread. Believe it or not, many hotels still count cars in parking lots to judge competitors’ occupancy, said Bonnie Buckhiester, revenue management consultant and HotelNewsNow.com columnist.
Even if this does become a bigger trend to cease call-arounds, rates are publicly available in other places online, said STR president Mark Lomanno. “(Hotels) don’t really need to (make calls) anymore, so it seems silly.
“It sounds like the attorney general doesn’t have anything better to do,” he added.
Let’s just hope other states are busier handling things such as health-care reform and budget deficits rather than worrying about the competitive hotel market and “harm to consumers.”
“It would seem that barring call-arounds could potentially open a ‘can of worms’ when it comes to hotel revenue management practices,” Buckhiester said. “Surely, it's occurred to the Connecticut authorities that hoteliers have the same access to online price comparison shopping tools as consumers. Where does it end?”
Have you encountered issues with call-arounds in your hotels? Let us know by commenting below.
