Federal Antitrust Grand Jury Indicted Nine Hawaiian Hotel Firms and their Trade Association on Charges of Conspiring to Fix the Price of Hotel Rooms

Department

of

Justice

FOR

IMMEDIATE

RELEASE

WEDNESDAY,

NOVEMBER

17,

1976

AT

202-739-2014

A

federal

antitrust

grand

jury

today

indicted

nine

Hawaiian

hotel

firms

and

their

trade

association

on

..

charges

of

conspiring

to

fix

the

price

of

hotel

rooms.

Attorney

General

Edward

H.

Levi

said

the

indictment

and a companion

civil

suit,

which names

the

association,

four

of

the

firms

indicted

and

three

additional

hotel

firms,

both

charged

a

violation

of

Section

1

of

the

Sherman

Act,

and were

filed

in

U.S.

District

Court

in

Honolulu.

Named

as

defendants

in

the

indictment

are:

ITT

Sheraton

Corporation

of

America,

Boston,

Massachusetts;

Sheraton

Hawaii

c·orporation,

Honolulu,

Hawaii;

Sheraton

Maui

Corporation,

Maui,

Hawaii;

Sheraton

Kauai

Corporation,

Kauai,

Hawaii;

The

Sheraton

Corporation,

Boston,

Massachusetts;

Sheraton

Hawaii

Hotel

Corporation,

Honolulu,

Hawaii;

Hilton

Hotels

Corporation,

Beverly

Hills,

California;

Cinerama Hawaii

Hotels,

Inc.,

Honolulu,

Hawaii;

Flagship

International

Inc.,

New

York,

New

York; and

Hawaii

Hotel

Association,

Honolulu,

Hawaii.

(OVER)

-2-

Named

as

defendants

in

the

civil

suit

are:

The

Sheraton

Corporation,

Boston,

Massachusetts;

Hilton

Hotels

Corporation,

Beverly

Hills,

California;

Western

International

Hotels

Company,

Seattle,

Washington;

Cinerama

Hawaii

Hotels,

Inc.,

Honolulu,

Hawaii;

Flagship

International

Inc.,

New

York,

New

York;

Interisland

Resorts,

Ltd.,

Honolulu,

Hawaii;

Island

Holidays,

Ltd.,

dba

Island

Holidays

Resorts,

Honolulu,

Hawaii;

and

Hawaii

Hotel

Association,

Honolulu,

Hawaii.

Five

of

the

six

Sheraton

corporations

named

as

defendants

in

the

indictment

are

predecessor

and

subsidiary

corporations

of

the

sixth

--

the

parent

Sheraton

Corporation

and

therefore

it

was

not

necessary

to

name them

as

defendants

in

the

civil

suit.

All

six

were

involved

in

the

operation

of

hotels

in

the

Hawaiian

Islands

at

various

times

since

1966,

during

the

conspiracy

period.

The

civil

suit

charges

the

same

conspiracy

as

the

indictment

but

includes

the

three

additional

defendants

as

co-conspirators.

Assistant

Attorney

General

Donald

I.

Baker,

in

charge

of

the

Antitrust

Division,

said

the

indictment

charges

the

defendants

with

engaging

in

a

conspiracy

since

sometime

prior

to

1966

until

at

least

December

20,

1974,

which

consisted

of

the

following

terms,

among

others:

-3-

adhering

to

published

or

established

room

rates;

refraining

from

offering

lower

room

rates

to

each

other's

customers;

exchanging

among

themselves

future

room

rate

information

for

the

purpose

of

fixing,

maintaining,

and

stabilizing

room

rates;

fixing,

maintaining,

and

stabilizing

certain

rates,

terms,

and

conditions

for

the

sale

of

hotel

rooms;

fixing,

maintaining,

and

stabilizing

commissions

to

be

paid

to

retail

travel

agents,

tour

operators,

and

others

for

the

sale

of

hotel

rooms;

and,

fixing,

maintaining,

and

stabilizing

concessions

in

the

form

of

free

rooms

or

beds

to

be

given

to

retail

travel

agents

and

others

for

the

sale

of

hotel

rooms.

The

hotel

firms

named

as

defendants

in

the

indictment

and

complaint

operate

a

large

number

of

the

major

hotels

in

the

Hawaiian

Islands.

Total

sales

of

rooms,

food,

and

beverages

by

such

hotels

in

1973

exceeded

$185

million,

and

room

sales

alone

were

more

than

$103

million.

The maximum

penalty

upon

conviction

of

each

defendant

is

a

$50,000

fine.

The

civil

suit

asks

the

court

to

enjoin

the

defendants

from

continuing

or

reviving

the

conspiracy

and

from

engaging

in

any

plan

or

program

having

a

similar

purpose

or

effect.

####