Hotel online booking: monitoring of pricing practices of online travel agents

The CMA monitored a range of pricing practices in the hotel online booking sector in the UK.

Monitoring of pricing practices results

Update 6 July 2017

Further to the ECN Report published on 6 April 2017, and one key finding that many hotels were not aware that Booking.com and Expedia no longer enforce ‘wide’ parity clauses or of what this means for hotels’ ability to differentiate their prices across OTAs, the CMA is taking steps to raise awareness among UK hotels of the changes.

As part of this work, the CMA has sent a “60 Second Summary” to UK hotels highlighting that Expedia and Booking.com used to require hotels to guarantee that they would not offer their rooms more cheaply on other OTAs.

Since summer 2015, Expedia and Booking.com have changed their policies and no longer impose this requirement. Expedia and Booking.com also now no longer require hotels to offer them the same or better room availability or conditions as hotels offer to other OTAs.

As a result:

  • 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 room extras or ‘breakfast included’) than on Expedia and/or Booking.com.

Update 6 April 2017

In light of the findings in the European Competition Network (ECN) report on the results of a monitoring exercise in the hotel online booking sector, the CMA has decided not to prioritise further investigation on the application of competition law to pricing practices in this sector at this stage.

On 6 April the ECN published its report on the results of the monitoring exercise in the hotel online booking sector. The CMA took part in the monitoring work, along with 9 other national competition agencies and the European Commission.

Update 22 December 2016

The results of our monitoring work are currently being collated and analysed and will be published in an ECN report early next year. The CMA along with the 9 other competition agencies who took part in the monitoring work and the European Commission will be considering the results and discussing next steps in early 2017.

Update 8 September 2016

The CMA has sent a questionnaire to a large sample of hotels in the UK as part of a joint monitoring project, in partnership with the European Commission and 9 other competition agencies in the EU.

This project is looking at how changes to room pricing terms, and other recent developments, have affected the market. In particular, whether the Europe-wide removal by online travel agents Expedia and Booking.com of certain ‘rate parity’ or ‘most-favoured nation’ clauses in their standard contracts with hotels in July 2015 has affected the market.

The CMA sent an initial request for responses to its questionnaire in July. We have now reopened the questionnaire, to give hotels a further chance to respond. The deadline for responses is 23 September.

Hotels in the UK that have not been directly contacted by the CMA are also welcome to complete the questionnaire. Please indicate on the form (at question 3) whether or not you received a direct communication from the CMA inviting you to participate.

The joint monitoring work is expected to be completed by the end of 2016 and will enable the CMA to determine whether or not there is a need for any further action in this sector.

Background

On 16 September 2015 the CMA closed its investigation into discounting restrictions in the hotel online booking sector.

At the same time, the CMA committed to 12 months of ongoing monitoring of market developments, after which time the CMA noted that it would take views received during this period into account when considering whether or not to take any other steps. The CMA also noted that it would continue to work closely with other national competition authorities and the European Commission.

Contacts

Project Director: Bethan Watts (bethan.watts@cma.gsi.gov.uk)

Assistant Director: Eithne McCarthy (eithne.mccarthy@cma.gsi.gov.uk)

Economist: Riccardo Ferrari (riccardo.ferrari@cma.gsi.gov.uk)

Published 16 September 2015
Last updated 6 April 2017 + show all updates
  1. Update published and case closed.
  2. Update on monitoring work results.
  3. Pricing practices questionnaire deadline extended to 23 September.
  4. Pricing practices questionnaires deadline extended to 23 September.
  5. Monitoring of pricing practices questionnaires announcement added.
  6. First published.