The 13 July 2016 saw the Competition and Markets Authority (CMA) announce that it had sent a questionnaire to a large sample of hotels throughout the UK. As part of a joint monitoring project with the European Commission, this project has also been launched by several competition agencies in the EU. The purpose of the project is to study how changes to hotel room pricing policies and a variety of other investigations have affected the online hotel booking sector.
In July 2015, online travel agents Expedia and Booking.com adjusted their terms and conditions to remove certain price parity (also known as most-favoured nation requirements) which prevented some hotels from offering cheaper room rates on competing online travel agents websites than what was currently being offered on Expedia and Booking.com.
The questionnaires that have been distributed, use a common approach across ten countries in to perform an assessment on how that change in the terms and conditions set out by these companies, together with other recent developments including a number of inquiries across Europe, have affected the market.
In September last year, the CMA made an announcement of its decision to end its investigations into pricing restrictions in hotel online booking due to administrative priority, but claimed it would not halt the monitoring of pricing practises of online travel agents. However, similar investigations were launched by numerous competition authorities in relation to Booking.com’s and/or Expedia’s price parity restrictions. This was seen in April 2015 when the French, Italian and Swedish competition authorities accepted commitments offered by Booking.com to adjust their price, availability and booking conditions with respect to other online travel agencies and certain other sales channels.
Other hotels within the UK who have not been directly contacted by the CMA are more than welcome to participate in the questionnaire. The deadline for this submission is the 8 August 2016, where the work on this project is expected to be completed by the end of the year, when it will finally conclude if the CMA and other agencies need to take further action.
The Senior Director for CMA, Ann Pope stated: “Consumer benefit from lower prices and better service in a truly competitive market in which hotels and online travel agents compete for their business.
The CMA is aware of concerns raised by a number of hotels about how this market is operating. This project is part of the CMA’s ongoing commitment to watch this market closely in order to ensure that consumer are benefitting from effective competition and we welcome responses to this survey, so that we can see how the market is developing in the light of recent changed”
The questionnaire can be found at the following address: https://ec.europa.eu/eusurvey/runner/CMAhotels