An investigation reveals that major hotel booking sites are quietly charging San Francisco residents up to $500 more per night for the exact same hotel rooms compared to travelers from less affluent cities.
SFGATE's investigation found that booking platforms like Expedia, Hotels.com, and Booking.com systematically inflate prices for Bay Area users based on their IP addresses. In one example, a room at Manhattan's Public Hotel was offered to San Francisco browsers at $829 per night, while users in Phoenix and Kansas City saw rates of just $318 for identical dates and accommodations.
"The classic definition of price discrimination is when two buyers pay different prices for identical items," explains Eric Goldman, a Santa Clara University law professor interviewed by SFGATE. While legal, the practice remains largely hidden from consumers.
The investigation tested five major booking sites under controlled conditions, comparing prices across different browsers, operating systems and locations. Geographic location emerged as the decisive factor in pricing, while browsing in "incognito" mode made no difference. The good news? There's a workaround: using a VPN to browse from a less affluent city can slash hundreds off hotel rates.
As Booking.com spokesperson Angela Cavis frames it, the higher Bay Area prices are the "real" rates, while other locations receive "promotional" discounts — small comfort to San Francisco travelers paying double for the same rooms.
"Right now, companies have an advantage, because they have more technology, machine learning and AI capability — they can deploy these against us," says Santa Clara University marketing professor Kirthi Kalyanam. "I see that as a temporary phenomenon. If too much power is shifted towards the seller, consumers will eventually fight back with technology that reclaims some of that power."
Previously:
• Mastercard's AI spies on you, jacks up prices: FTC finally investigates 'surveillance pricing'