Skyscanner appeals hotel discount rulingSite argues consumers will miss discounts
31 March 2014
Price comparison site Skyscanner is challenging an Office of Fair Trading ruling that it claims is restricting consumers’ access to hotel room discounts.
The company has launched a formal appeal against the ruling that was made at the end of an OFT investigation into alleged price fixing between Intercontinental Hotels Group (IHG), and online agents Booking.com and Expedia.
The OFT launched that investigation after a small online agent Skoosh.com complained that agreements between the three companies were stopping other agents from offering discounts.
After a three year investigation, the OFT ruled that all agents must be allowed to offer discounts on IHG hotel rooms, but it put a series of conditions on how consumers could access those discounts.
To get the discounts, consumers will have to sign up to a membership with the online agent offering them. They must also buy one full-price hotel room from the companies in question to qualify.
Although the ruling applies specifically to IHG, Booking.com and Expedia, the OFT has said it expects other hotel chains to consider its findings when they decide their own discounting policy.
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Expedia, Booking.com and IHG
Skyscanner and other price comparison sites believe that consumers will be unable to make decisions based on the full range of prices available in the market, because the discounts will be hidden in online travel agents’ member-only areas.
A Skyscanner spokeswoman said it was one of six companies that wrote to the OFT raising serious concerns that the decision would have 'an anti-competitive effect and will in fact result in a worse deal for consumers'. The company has appealed to the Competition Appeals Tribunal.
The spokeswoman explained: 'It will be much harder for consumers to compare available rates and find the best prices as a result of this decision. The requirement to make a full price booking before benefiting from discounts, and the low frequency of purchases of hotel rooms means that it would take considerable time to recoup the cost of making a single booking at full price on a number of travel agency sites.
'To find the best price, customers will also need to visit multiple websites with separate logins, making it difficult to identify and compare the best price. This is a large backwards step in the online travel market and will hinder further innovation.
'We want the OFT to reopen its investigation so that the industry can work together to find a transparent and competitive means of comparing the best prices offered by hotels and online travel agencies.'
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