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Renewed calls for rate-parity clauses to be banned as research highlights benefits of booking direct

03 March 2020 by
Renewed calls for rate-parity clauses to be banned as research highlights benefits of booking direct

Renewed calls for online travel agents' (OTAs) rate-parity clauses to be banned have been made after research by Which? showed they can see room rates increase by up to 12%.

The consumer group found that eight of the 10 UK hotels it contacted directly by phone or email were able to offer a better deal than could be found on either OTAs or the hotels’ own websites.

OTAs typically charge between 15% and 25% in commission and enforce rate-parity clauses in their contracts with hotels.

UKHospitality chief executive Kate Nicholls said: “This data reiterates what we have been saying for a long time. Parity clauses do not favour consumers and they take commercial power away from the hotels. They have been banned in other European countries and they should be banned in the UK.”

Rate-parity clauses have been banned in France, Italy and Austria for preventing competition, but the Competition and Markets Authority (CMA) chose not to ban the clauses in the UK in its recent review of OTAs.

Both Booking.com and Expedia have told Which? their commissions are not driving up prices.

In February 2019 the CMA announced a crackdown on ‘unacceptable' practices by OTAs including pressure selling, hidden charges and claims of false discounts.

By November last year it had secured changes from the majority of hotel booking sites operating in the UK, however, at that time, six of the largest hotel groups including Accor, InterContinental Hotels Group (IHG), Hilton, Marriott International, Radisson Hotel Group and Wyndham Hotels and Resorts requested more time for ‘technical reasons’.

Rory Boland, editor of Which? Travel, said: “Customers shouldn’t be duped into thinking they’re getting the best price from a hotel booking site when more often than not; they can get a better deal by avoiding its commission and booking directly with the hotel.

“Hotel booking sites might be a good place to start your search, but you should always call or email the hotel for the best chance of getting the cheapest deal – even in cases where they can’t offer a better price, there’s a good chance they’ll throw in a freebie or two.”

Picture: Shutterstock

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