We issued a briefing last year about rate parity agreements between hotels and online travel agents (OTAs), and the attention they have been receiving from competition regulators (I then turned that briefing into an article for Big Hospitality).
The CMA had just closed its own investigation following announcements from Expedia and Booking.com that they would be abandoning their requirement that hotels in the EU give them rate parity with other online travel agents.
We said at the time that that might not be an end to the matter, however, as the OTAs' undertaking did not extend to allowing hotels to offer lower prices via their own websites. So it proved just before Christmas, when Germany's Bundeskartellamt (Federal Cartel Office) declared that Booking.com was breaching competition law by insisting on that remaining restriction. Booking.com are appealing the decision, but it seems consistent with an earlier decision against competitor HRS, which was upheld on appeal. Booking.com have been given to the end of this month to lift all their rate parity clauses with German hotels.
If the German approach to this issue appears somewhat piecemeal (there is also a separate ongoing investigation into Expedia), that is even more true of the EU as a whole, with various national regulators all carrying out their own investigations. The OTAs and the larger hotel chains are therefore keen to have an EU-wide resolution, and the Commission are reportedly in the early stages of that.
In the meantime, developments in other nations (if they don't lead to the OTAs voluntarily lifting all remaining restrictions in the UK) may prompt further action from the CMA, who said in September that they would be keeping the market under review and whose strategic plan for 2016/17 very much focuses on the online sphere. This will include a review of price comparison websites, which may well bring OTAs back onto the CMA's agenda (CNBC's coverage of the German developments leads with an interesting and quasi-related dispute between Booking.com and the new price comparison 'widget' developed for hotel websites by British start-up Triptease).
I'm sure this won't be the last development in relation to rate parity, so please do hit the subscribe button on the right if you'd like to make sure you receive our future updates.
Please also don't hesitate to get in touch, or leave a comment, if you have any queries or would like to discuss this issue.
