Press release

Monitoring project launched in online hotel booking sector

Hotels across the UK have been sent a questionnaire by the CMA, which is monitoring how changes to room pricing terms are affecting the market.

A hotel sign.

The monitoring project has been launched by the Competition and Markets Authority (CMA) in partnership with the European Commission and 9 other competition agencies in the EU.

In July 2015, online travel agents Expedia and Booking.com changed their terms and conditions to remove certain ‘rate parity’ or ‘most-favoured nation’ requirements, which prevented hotels from offering cheaper room rates on competing online travel agents’ sites than are offered on Expedia and Booking.com.

The questionnaires, which use a common approach across the 10 countries, will collect information to assess how that change, alongside other recent developments – including several investigations across Europe into a range of pricing practices in the online booking sector – have affected the market.

The joint monitoring work – which is expected to be completed by the end of 2016 – will enable the CMA, which closed an investigation into the sector in September 2015, and other competition agencies, to determine whether or not there is a need for any further action in this sector.

The views of other hotels in the UK which have not been directly contacted are also welcome. Interested hotels that wish to participate can go to the CMA’s project page, where a link to the questionnaire is available. Ann Pope, CMA Senior Director for Antitrust, said:

Consumers 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 consumers are benefitting from effective competition and we welcome responses to this survey, so that we can see how the market is developing in light of recent changes.

Notes for editors

  1. The CMA is the UK’s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law. For more information see the CMA’s homepage on GOV.UK. For CMA updates, follow us on Twitter @CMAgovuk, Flickr and LinkedIn.
  2. The other participating national competition agencies are: Belgium, the Czech Republic, France, Germany, Hungary, Ireland, Italy, the Netherlands and Sweden.
  3. On 16 September 2015 the CMA closed its investigation into suspected breaches of competition law in the hotel online booking sector which was launched by the Office of Fair Trading, the CMA’s predecessor. This investigation was one of several investigations across Europe into a range of pricing practices in the hotel online booking sector. The CMA closed the case on administrative priority grounds, and did not take any decision as to whether the Competition Act 1998 and/or Treaty on the Functioning of the European Union had been infringed. At the same time as it closed this investigation, the CMA committed to monitoring developments in this market.
  4. The deadline for receipt of views by the CMA is Monday 8 August 2016.
  5. Enquiries should be directed to Simon Belgard (simon.belgard@cma.gsi.gov.uk, 020 3738 6472).
Published 13 July 2016