‘Bait & switch’ pricing tactics found at Arizona hotel by watch dog group

Little America is owned by the Holding family, one of the richest in America.

FLAGSTAFF, Ariz. — After a consumer watchdog identified alleged online “bait & switch” pricing tactics by hotel chain Little America, the company altered its website and said they are investigating the matter.

“It’s a rip-off of the customers. They’re shown one thing and charged another,” said data analyst Abhay Padgaonkar, who has a history of exposing consumer fraud.

Padgaonkar demonstrated how booking a two-night stay at the Little America in Flagstaff was 21% higher than the original rates advertised on the website.

The rates initially listed on the website’s calendar as $124 and $195 for two nights.

That changed after clicking on the page to proceed with the reservation.

Suddenly, a new webpage shows the average for the two nights is $193.50 without including “taxes and fees,” $34 more than the average of the listed price, $159.50.  

That’s not the only problem.

After clicking to proceed, the higher average rate is shown along with a line stating, “$14.12 additional taxes and fees per night.” For two nights, the total taxes equal $28.24 — but Little America’s total on the final booking page shows $44.

 A pull-down screen shows that the second day, which was originally advertised for $195, is being charged at $263.

 All told, the reservation is more than 21% higher than what Little America originally showed.

 Padgaonkar compared the process to a store listing a price tag on the shelf, then charging a higher amount at the cash register.

“This is essentially the electronic version of the same thing,” Padaonkar said.

12News randomly sampled six hotels affiliated with Little America in four states (Utah, Wyoming, Idaho, California, and Arizona).

13 of the 20 nights had higher totals in the same way Padgaonkar demonstrated.

The biggest discrepancies involved Little America hotels in Flagstaff and San Diego. Flagstaff had hidden costs as much as $30 per night.

San Diego’s were as much as $19 per night.

A three-night stay in Salt Lake had a higher total of $24. Three nights at a Wyoming Little America cost $27 more than advertised.

A media representative for Little America did not respond to 12News about how long the alleged pricing discrepancies have been in place, but Padgaonkar said he first noticed the problem last year.

“The concern is, you know, $30 more, $60 more, $100 more per booking, and millions of bookings over how long? That could be an enormous amount of overcharge,” Padgaonkar said.

In May, the FTC put into effect a new rule against “Unfair or Deceptive Fees,” requiring hotels to “tell consumers the whole truth up-front about total prices and fees.”

According to Forbes Magazine, Little America is headquartered in Salt Lake and is owned by the Holding family, historically one of the richest in America.

12News asked Little America Hotel how long the problem has existed, how many customers were impacted, and whether the hotel will self-disclose the issue to the FTC or Attorneys General in Utah and Arizona.

The spokesperson issued a written statement: “This matter was recently brought to our attention. We are performing an investigation and will act accordingly.”

Padgaonkar said he hopes Attorney General Kris Mayes will investigate Little America and the tech booking company that partnered with the hotel.

According to the Eastern Arizona Courier, Mayes recently announced a price deception settlement against a brick-and-mortar store, Family Dollar Stores.

Padgaonkar exposed the bad customer service of Arizona utility APS that led to a $25 million consumer settlement with the state. He was also the sole whistleblower in a Medicaid and Medicare fraud case that landed a Michigan doctor in prison and returned $43 million to the federal government.

In this case, Padgaonkar says he called Little America on July 4 and spoke with a reservation employee located in Utah. 

According to Padgaonkar, after he demonstrated over the phone with employee the discrepancy between the advertised price and final price, the employee said it was “disturbing.” Padgaonkar asked the employee to ensure his complaint reached Little America management. The employee told Padgaonkar the phone conversation, which lasted nearly an hour, was recorded by Little America.

“The employee honored the lower cost for the hotel stays,” Padgaonkar said. “I don’t know if I’ll keep the reservation, but for now I have the room booked.”

 As of Thursday afternoon, Little America was no longer listing prices on the calendar view.

 “The fact that they are no longer showing nightly prices on the calendar validates the existence of the underlying discrepancy in prices ‘before’ and ‘after’ — but the tax issue was still not fixed,” Padgaonkar said in a written statement Thursday evening. “While I appreciate the hotel acknowledging the problem and taking quick action, it still leaves many important questions unanswered about the breadth and depth of the problem and whether and how they intend to make the customers whole by honoring the lower prices shown.”

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