|Office of Fair Trading consults on proposed hotel booking commitments.|
Monday, 12th August 2013
Source : Office of Fair Trading UK
The OFT opened a consultation on commitments proposed by two OTAs†and†IHG, designed to address its competition concerns in relation to the online offering of room only hotel accommodation bookings by Online Travel Agents.
Announced August 9th: The three businesses (Booking.com,†Expedia Inc and InterContinental Hotels Group) under investigation are proposing to address the OFT's concerns by giving formal commitments that would relax existing restrictions so that OTAs can provide discounts on the rate at which room only hotel accommodation bookings are offered. Under the proposed commitments, OTAs would be free to use their commission revenue or margin to fund discounts to consumers who meet certain criteria.
These proposed commitments follow an OFT Statement of Objections issued on 31 July 2012. This alleged that Booking.com and Expedia each entered into separate agreements with IHG which restricted each OTA's ability to discount the rate at which room only hotel accommodation bookings are offered to consumers.
The OFT limited the scope of its investigation to a small number of major companies, with a view to achieving a swift and effective outcome. However, the investigation is likely to have wider implications as the alleged practices are potentially widespread in distribution arrangements in the industry.
Ann Pope, Senior Director in the OFT's Services, Infrastructure and Public Markets group, said:
'The OFT is consulting on whether these commitments offer an immediate and effective means of injecting some meaningful price competition into the online offering of room only hotel accommodation bookings where, in our provisional view, none may exist. Under the proposed commitments, OTAs would be able to offer discounts off hotel room bookings to qualifying consumers. The OFT would now like to hear the views of all interested parties before it makes its decision on whether to accept the commitments.'
Any person wishing to comment on the commitments should submit their views to the OFT by 13 September 2013 to:
Hotel Online Booking Team
Office of Fair Trading, Fleetbank House, 2-6 Salisbury Squarem London EC4Y 8JX
IHG Response to OFT Statement
InterContinental Hotels Group notes the announcement from the Office of Fair Trading (OFT) on August 9th regarding its investigation into the online supply of room only hotel accommodation by online travel agents. The OFT has today commenced a public consultation on a series of commitments designed to bring an end to this investigation without finding of infringement or the imposition of any fine. IHG has worked closely with the OFT to agree these commitments, which are now subject to a consultation period ending 13 September 2013.
For further information:
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