Travellers may have the chance of better deals on UK hotel room rates after the Office of Fair Trading (OFT) ruled that online travel agents such as Expedia and Booking.com must be allowed to offer discounts.
The ruling follows an investigation by the OFT that started in 2010 after a small online travel agent called Skoosh.com complained that some hotel chains were preventing it from offering discount prices for room-only hotel accommodation.
OFT has now accepted a formal commitment from the three companies it investigated – the Intercontinental Hotels Group (IHG), Booking.com and Expedia – that all online travel agents dealing with them will be able to offer discounts off headline room-only rates.
Hotel price fixing
Booking.com and Expedia had each entered into separate agreements with IHG, which prevented the travel agents from offering discount rates for room-only accommodation. The OFT had accused the businesses of breaking competition law relating to price fixing.
The OFT concentrated on the three companies because IHG, which includes chains such as Holiday Inn and Crowne Plaza, is the biggest international hotel company in terms of hotel numbers and Booking.com and Expedia are two of the largest online travel agents in the UK. However, during the investigation, it said the alleged practices were ‘potentially widespread’ in the travel industry.
Cheap hotel deals
The new commitments, which will last for two years, mean that online travel agents (OTAs) will be entitled to offer discounts on IHG’s room-only rates, but they have to meet certain conditions to do so.
These conditions mean the agent can offer a discount only if:
- the customer has already made one undiscounted booking with the travel agent or hotel in question
- the customer signs up to the membership scheme of an online travel agent or hotel to view discounts
- it is for a UK hotel and not part of a package
An OFT spokesperson said: ‘We are pleased to have secured this outcome which, by allowing OTAs and hotels to offer discounts, should increase competition and mean travellers across Europe can benefit from reductions on hotel accommodation throughout the UK.
‘By shopping around, people can compare the different discounts offered by hotels and OTAs, and ensure they get the best deal.’