OTAs caught overcharging travelers from Bay Area

An investigation shows that hotel booking sites charge San Franciscans up to $500 more per night for the same rooms than travelers from less affluent cities

SFGATE's investigation found that booking platforms like Expedia, Hotels.com, and Booking.com routinely raise prices for Bay Area users based on their IP addresses. For example, a room at Manhattan's Public Hotel was priced at $829 per night for San Francisco users, while travelers in Phoenix and Kansas City saw rates as low as $318 for the same dates and room.

Key takeaways

• The assumption at the core of online price discrimination is that some consumers are willing to pay more than others and are more likely to pay if unaware of alternatives;
• Eric Goldman, a law professor at Santa Clara University, tells SFGATE: "Price discrimination occurs when two buyers pay different prices for the same item. While the practice is legal, it is often largely hidden from consumers;
• The research tested five booking sites and found that location, not incognito mode, determines pricing. Using a VPN to browse from a less affluent city can reduce hotel rates by hundreds.

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