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Online hotel firms limiting price competition say OFT

Two online travel companies and a hotel group are in danger of limiting competition on hotel room sales, according to the early outcomes of an investigation by the Office of Fair Trading.

Intercontinental Hotels Group (IHG) have entered into separate agreements with Booking.com and Expedia, which may be in danger of infringing competition law.

However, Expedia have claimed that the OFT have yet to prove that any laws have been broken.

A spokesperson said: “Expedia remains committed to ensuring that it provides consumers with the widest possible choice of travel options at competitive prices and will seek to safeguard its ability to continue to do so in relation to the current regulatory process.”

IHG echoed this, stating that their arrangements with online agents were “compliant with competition laws and consistent with the long-standing approach of the global hotel industry”.

The three firms will be given three months to respond to the allegations.

Some hotels sell rooms directly to customers, but also use online agents to keep occupancy levels high.

The investigation began in September 2012 after Skoosk.com, a discount travel website, and that it was under pressure to maintain standard prices, rather than sharing commission with customers.

The OFT have found that the agreements between IHG with Booking.com and Expedia had the potential to limit competition and prevent other companies from expanding.

Clive Maxwell, OFT chief executive said: “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.

This was posted in Bdaily's Members' News section by Ruth Mitchell .