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Online hotel booking under EU scrutiny

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Online hotel booking under EU scrutiny

Photo by Bin im Garten

(BRUSSELS) - The European Commission and ten national competition authorities published a report on competition in the online hotel booking sector Thursday, highlighting the impact of antitrust enforcement measures.

The report presents the results of a coordinated monitoring exercise carried out by the Belgian, Czech, French, German, Hungarian, Irish, Italian, Dutch, Swedish and UK national competition authorities and the Commission during 2016.

Its purpose was to assess the effects of antitrust enforcement measures adopted in recent years in this sector, which have led to changes to the so-called 'wide parity clauses' used by online travel agents in their contracts with hotels.

These clauses force hotels to give the online travel agent the lowest room prices and best room availability relative to all other sales channels.

While 'narrow parity clauses' allow hotels to offer lower room prices and better room availability on other online travel agents and offline sales channels, they also prevent hotels from publishing lower room prices on their own websites.

The monitoring exercise covered aspects of the way hotels market and sell their rooms, focusing on room price and room availability differentiation by hotels between sales channels and online travel agent commission rates.

The participating authorities sent questionnaires to a sample of 16,000 hotels in the ten Member States, 20 online travel agents, 11 metasearch websites and 19 large hotel chains.

The results of the exercise suggest that measures applied to the parity clauses, namely (a) allowing large online travel agents to use narrow parity clauses, and (b) prohibiting online travel agents from using them altogether, have generally improved conditions for competition and led to more choice for consumers.

Based on the results, the European Competition Network (comprising the national competition authorities of all EU Member States and the European Commission) has agreed to keep the online hotel booking sector under review and to re-assess the competitive situation in due course.

This will allow the sector more time to make full use of the measures that have already been taken. New enforcement actions or market investigations in the online hotel booking sector will be closely coordinated within the European Competition Network.

Report on ECN monitoring exercise in the online hotel booking sector

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