One hotel group and two online travel agents may be found guilty of limiting the price competition on their hotel room rates after the preliminary results of an investigation have been released.
According to an investigation performed by the Office of Fair Trading, Expedia and Booking.com both entered into separate agreements with IHG or Intercontinental Hotels Group. The OFT has provisionally ruled that the agreements are not in line with competition law, but IHG and Expedia are arguing that their agreement is properly in compliance with the law and that the OFT cannot prove that any laws were broken.
In a statement released by Expedia, the company stated that they remain committed to offering the best rates to their consumers by offering them a wide array of travel options all set at great rates. The statement also stated that Expedia is working hard to make sure they will continue to be able to do so against the regulatory process.
IHG also commented and stated that their arrangements with the online booking companies were in compliance with the laws of the global hotel industry and the competition law. The firms have three months to respond to the claims by the IHG.
Hotels always have the option to sell rooms directly to customers, but anymore most hotels choose to use online agents in order to make sure their occupancy levels stay high. The online travel agency sector in the UK is actually the largest in Europe with the OFT estimating that online travel accommodations brought in about £850m back in 2010.
This is due to the fact that the online sale of hotel rooms has become major business that is dominated by global websites and hotels that offer the rooms on commission placing an added incentive on the sale.