Online hotel booking: monitoring the pricing practices of online travel agencies

Update August 20, 2020

Booking.com and Expedia have confirmed to CMA that hotels using either of these sites remain free to offer different prices, terms and availability when listing their rooms on other online travel agents. Formal commitments made in 2015 by Booking.com and Expedia not to apply “broad” parity clauses expired on July 1, 2020, but the companies have confirmed that they will continue to act in accordance with the commitments in the future. Both companies have also confirmed that their commitments will still apply in the UK.

the CMA will continue to monitor market developments.

Monitoring the results of pricing practices

Update July 6, 2017

Following the REC Report released April 6, 2017, and a key finding that many hotels were unaware that Booking.com and Expedia no longer enforce “broad” parity clauses or what this means for hotels’ ability to differentiate their prices through OTAthe CMA is taking action to make UK hotels aware of the changes.

As part of this work, the CMA sent a ’60-second summary’ to UK hotels pointing out that Expedia and Booking.com used to require hotels to guarantee they wouldn’t offer their rooms cheaper on others OTA.

As of summer 2015, Expedia and Booking.com have changed their policies and no longer impose this requirement. Expedia and Booking.com no longer require hotels to offer them the same or better availability or room conditions than hotels offer to others. OTA.

As a result:

  • Hotels may choose to offer a lower price on other OTA than what they offer on Expedia and/or Booking.com
  • Hotels may also decide to offer other OTA better availability or conditions (such as room supplements or “breakfast included”) than on Expedia and/or Booking.com.

Update April 6, 2017

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

On April 6, the REC published its report on the results of the monitoring exercise of the online hotel reservation sector. the CMA participated in monitoring work, alongside 9 other national competition authorities and the European Commission.

Updated December 22, 2016

The results of our monitoring work are currently being collated and analyzed and will be published in a REC report early next year. the CMA with the other 9 competition authorities that participated in the monitoring work and the European Commission will review the results and discuss next steps in early 2017.

Update September 8, 2016

the CMA 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 examines how changes in room pricing conditions and other recent developments have affected the market. In particular, if the Europe-wide removal by the online travel agencies Expedia and Booking.com of certain “price parity” or “most favored nation” clauses in their standard contracts with hotels in July 2015 affected the market.

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

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

The joint monitoring work should be completed by the end of 2016 and will allow the CMA to determine whether or not further action is needed in this area.

Background

On September 16, 2015, the CMA has closed its investigation into discount restrictions in the online hotel booking industry.

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

Project Manager: Bethan Watts ([email protected])

Deputy Director: Eithne McCarthy ([email protected])

Economist: Riccardo Ferrari ([email protected])

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