Booking hotels online: CMA continues to monitor practices and behaviour
First published by Author on September 03, 2020 in the following categories: Advertising Incentives Industry Pricing Selling Restrictions Travel and Holidays and tagged with advertising | cma | competition law | investigations | market study | pricing | travel
The Competition and Markets Authority (CMA) continues to monitor pricing practices and behaviours for booking hotels online.
Since the completion of their investigations in 2015 into the sector, they have been actively engaged in monitoring developments. As an important sector to keep track of, their work – and that of their European competition counterparts – is clearly important.
Here is some information about the CMA’s latest publication of their work in this sector, and a brief background of the preceding events.
Background of the investigation and monitoring for booking hotels online
The CMA’s monitoring for booking hotels online – prices and practices – has been going on now for five years this month. In September 2015, the CMA closed its investigation into discounting restrictions, and committed to a 12-month monitoring system to keep track of developments.
The CMA also agreed to work closely with European counterparts to ensure that the industry is behaving appropriately. As part of its European partnership, the regulator sent out questionnaires in September 2016 to look at how changes to pricing terms for rooms, among other things, had impacted the market. One particular focus was on the removal of ‘rate parity’ or ‘most-favoured nation’ clauses for companies like Expedia and Booking.com.
By April 2016, the CMA confirmed that they had taken the decision to not engage in any further formal action. There was, however, some later advice issued in relation to what it meant for online travel agencies now that both Expedia and Booking.com were no longer using ‘wide parity clauses’.
August 2020 – the latest
According to the CMA in their latest update about their monitoring of pricing matters for booking hotels online, they confirmed as follows:
Booking.com and Expedia have confirmed to the CMA that hotels using either site remain free to offer different prices, terms and availability when listing their rooms on other online travel agents. Formal commitments made in 2015 from Booking.com and Expedia not to enforce ‘wide’ parity clauses expired on 1st July 2020 but the companies have confirmed that they will continue to act in accordance with the commitments going forward. Both companies have also confirmed that their commitments will still apply in the UK.
They have also confirmed that they continue to monitor developments in the market.
An important matter to manage
It is incredibly important to manage pricing policies, behaviours and practices of companies and sectors involving booking hotels online. The age of the internet has opened us up to being able to compare deals and chase the best prices quickly and efficiently, but it can get confusing. There are now multiple sites offering comparisons for a range of products and services, and several platforms advertising the same rooms and hotels for travel and tourism.
What we can’t have is things getting out of hand where pricing restrictions are imposed and deals can only be enjoyed by using certain platforms. There must be healthy competition between the platforms and service providers in the industry, or the consumer ends up being unable to get the best deal that they deserve.
The CMA will no doubt ensure that no one is breaking the law in this lucrative market sector.