OFT Consults On Proposed Hotel Booking Commitments

(RTTNews) - The Office of Fair Trading or OFT opened a consultation on commitments proposed by Booking.com B.V., Expedia Inc. (EXPE) and InterContinental Hotels Group plc (IHG.L, IHG), designed to address its competition concerns regarding the online offering of room only hotel accommodation bookings by Online Travel Agents or OTAs.

The three businesses under probe are proposing to address the OFT's concerns through formal commitments, which would relax existing restrictions so that OTAs can provide discounts on the rate at which room only hotel accommodation bookings are offered. According to the proposed commitments, OTAs would be free to use their commission revenue or margin to fund discounts to consumers who meet certain criteria.

The OFT limited the scope of its investigation to a small number of major companies, aiming 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."