Competition makes prices go down. This is a simple economic reality. In the hotel industry, competition happens between hotels themselves, but also websites that hunt for the best deal for a room.
However, a powerful lobbying group is currently trying to malign sites like Expedia.com as allegedly being misleading. While that is bad enough in its own right, the fact that a number of members of Congress have not only bought into the hype, but are demanding the Executive Branch do something about it, is exceptionally problematic.
The powerful hotel lobby, formally known in Washington as the America Hotel and Lodging Association (AHLA), has undertaken a campaign to smear their competitors — and they are openly bragging about it. They have placed dozens of media stories in television and newspapers warning consumers about the dangers of using companies like Expedia and others. The common theme of the media blitz is, if you want to safely get a room (even at a higher price), book directly with the hotel chain. If that doesn’t wean consumers off their “hotel cocaine” addiction, perhaps a more costly and direct intervention will succeed — government action. The lobbyists used the stories they placed to convince members of Congress to get involved on their side.
Five Arizona congressmen, including some free-market proponents like Rep. Paul Gosar (R-AZ) sent a letter to the Department of Justice demanding a look. Worse yet, the Senate Judiciary Committee Chairman Sen. Chuck Grassley (R- Iowa), who oversees the Federal Trade Commission (FTC) sent a letter urging action. The Senator appears to have mirrored the claim of the hotel lobbyists that these third party sites are tricking consumers into believing they are actually booking directly. Consumers must be too stupid to know the difference between Expedia.com and Marriot.com. This is another example of cronyism that is inherent with both political parties.
In this case, however, there is a smoking gun. In addition to the near quarter of a million dollars in political contributions the AHLA has handed out, there is a public copy of an email from the head lobbyists of the hotel group bragging about their campaign.
Crony Capitalism is definitely a subject that should unite everyone on the political spectrum, and dishonest practices that assume American consumers are complete idiots and in need of the government to keep us safe from ourselves deserve a lot more attention than they usually get. Websites like Expedia help you to find the best price for your room, so by trying to get the government involved, the hotel special interest organizations are attempting to use that authority to get you to pay more than you should have to.
Pretty disgusting if you ask us.