OFT Investigating Competition Law Breaching in the Hotel Industry

Some big players in the hotel bookings online might be pronounced guilty of breaching competition law. This has been found by the Office of Fair Trading. According to their report the popular websites for hotel bookings and holiday planning booking.com and Expedia might have individually been related with Intercontinental Hotels Group (IHG) in a way, which might be breaching the regulations.

It turned out that there is a possibility these websites and IHG, operating chains as Holiday Inn and Intercontinental to have entered into agreement, where Booking.com and Expedia set uniform prices within the market, which is not fair to the competition. The investigation was launches, as a small travel agency complained they were not allowed to discount some of their hotel room prices. The travel agency decided to share some of their commission with the prospective visitors, but they were not allowed to do so, as ” they claimed that various hotels would not allow them to discount the rooms offered on their site”.

When asked for comment, IHG has denied the accusations, claiming there were no such agreements and their policy is complain with the competition legislation. The case is still under investigation, as a response from both companies is being awaited.

The statement made by IHG, claiming they were “consistent with the long-standing approach of the global hotel industry” made OFT suggest that this situation might be more complicated than it looks.

During the intial investigation, some large companies had been checked and the questionable practices have been claimed as “endemic” to the hotel industry, which could mean a widespread breach of competitive regulations

OFT chief executive Clive Maxwell- OFT chief executive stated: “We want people to benefit fully from being able to shop around online and get a better deal from discounters that are prepared to share their commission with customers.”