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Competition watchdog urges hotels to take advantage of demise of price parity

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Competition watchdog urges hotels to take advantage of demise of price parity

by Lee Hayhurst

The Competition and Markets Authority is encouraging hoteliers to increase competition by varying deals on different online travel agency partners.

The UK regulator took part in EU-wide research with nine other national competition agencies involving hotels, OTAs and metasearch sites.

It found 79% of hotels had not varied the price for their rooms across OTA platforms since 2015 when Expedia and Booking.com agreed to stop insisting on price parity clauses.

The research also found 47% of hotels surveyed were not aware that Booking.com and Expedia had even made these changes.

The CMA today published guidance for hotels for the setting of prices for online travel agents.

Ann Pope, senior director at the CMA said: “Research shows that hoteliers were not always aware of their rights when it came to pricing their rooms on large platforms such as Expedia and Booking.com.

“We have published this guidance today to raise hotels’ awareness of the changes that have been made and the freedom they now have over pricing, to help improve competition in the market.”

The CMA advice states: “Hotels can choose to offer a lower price on other OTAs than they offer on Expedia and/or booking.com.

“Hotels can also decide to offer other OTAs better availability or conditions (such as extras or ‘breakfast included’) than on Expedia and/or booking.com.”

It goes on to list other “things you should know”:

•    Expedia and booking.com have also committed to allow hotels to offer lower prices in “offline” marketing channels than their prices on OTAs (provided that such “offline” rates are not published or marketed online by hotels).
•    In other words, hotels can offer any price they wish to customers in person, by telephone, direct email or through private closed-user groups (eg hotel loyalty groups).
•    However, OTAs, including Expedia and Booking.com, may still have clauses in their contracts which stop hotels charging lower prices on a hotel’s own website than they offer through OTA websites.
•    Hotels should be aware of the points above when they are negotiating terms with OTAs.

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