If You Live In This Popular California City, Hotel Booking Sites Might Overcharge You

Have you noticed hotel prices change depending on your physical location when booking? You're not crazy, nor are you a conspiracy theorist; price discrimination is a real thing. And if you live in certain locations — including a popular California city — you may be a target.

In an investigative piece, an SFGATE journalist conducted a price comparison for various hotels. They focused on the same rooms and time period, using search engines such as Booking.com, Kayak, Expedia, Hotels.com, and Trivago. However, the independent variable was that they searched from multiple locations and browsers simultaneously. The result? Those browsing from the San Francisco Bay Area were consistently quoted higher prices than those in Kansas City or Phoenix, sometimes as much as $500 more per night. San Francisco is one of the most expensive cities in the United States, and booking sites may assume these consumers have more money and are willing to shell out big bucks when traveling. Whether or not this is true doesn't detract from the fact that these sites are taking advantage of individuals.

So how do booking sites know where you are? It all comes down to your IP address, which stands for "internet protocol." All devices connected to the internet have an IP address, which shares the city, zip code, or area code of where you are connected. Don't worry — it doesn't share your exact location, but the location of your internet provider's closest server. So, if you want to snag better hotel deals, we wouldn't recommend booking from the Bay Area — that is, unless you have a clever workaround.

Browsing in private or incognito mode won't improve hotel prices. Booking sites may not have access to your search history, but they'll still know your IP address and subsequently have a general idea of your location. To avoid being overcharged, you'll need to take it a step further by getting a virtual private network (VPN). A VPN hides customers' IP addresses, allowing them to connect to remote servers and choose their geographic regions. VPNs generally require a subscription but are an effective way to save money when booking travel, not solely on hotels but also on flights.

Those who prefer not to invest in a VPN can book from other destinations. They can ask friends from less affluent regions of the U.S. to book on their behalf. Or, if traveling to several destinations, they can book hotels on the road. Generally speaking, booking hotels last minute can often be cheaper, but it comes with some risks. When booking in peak travel seasons, you may have fewer choices and be left with less-than-ideal or pricier options.

Another tip for finding budget accommodations is to look on Airbnb. Prices are often the same or cheaper than hotels. However, Airbnb has also been accused of price discrimination by using geo-based pricing similar to hotel booking sites. Lastly, consumers can try the old-fashioned route of booking through a hotel directly, either over the phone or through its website. Ultimately, we recommend conducting your own price comparison by reviewing booking sites, hotel websites, and Airbnbs before making a final decision.