Hilton, IHG and Marriott under CMA investigation for information sharing

The UK government’s Competition and Markets Authority (CMA) has launched an investigation into suspected sharing of competitively sensitive information among competing hotel chains – Hilton, IHG Hotels and Marriott – using hotel data analytics tool STR, owned by CoStar.

 

The CMA stated that all four businesses are under investigation.

 

STR aggregates data from 90,000 hotels representing 11.8m guest rooms in more than 190 countries, to enable hospitality data benchmarking, analytics and marketplace insights.

 

The CMA said: “Hotel chains use STR and other data analytics tools and algorithms to help them make commercial decisions. This can bring benefits including more intense competition, lower costs, and faster changes in prices to better match demand and supply in markets.

 

“However, when rival businesses share competitively sensitive information – including through a third-party data analytics provider – this reduces the uncertainty competing businesses normally have about how each other will act. This can affect how strongly companies compete because it makes it easier for them to predict what each other will do and coordinate their behaviour.”

 

The competition watchdog underlined that “no assumptions should be made about whether the law has been broken”, adding: “Following a period of investigation and information gathering, the CMA may issue a statement of objections if it comes to the provisional view that competition law has been infringed.”

 

The regulator provisionally outlined that the initial investigation and information gathering stage will last until August.

 

IHG issued a statement saying that it had been notified about the investigation, responding: “IHG will co-operate fully with the CMA’s inquiries. The CMA noted that no assumptions should be made about whether competition law has been infringed. IHG will not be making any further comment at this time.”

 

A Hilton spokesperson said: “We are co-operating fully with the CMA’s inquiries.”

 

Marriott declined to comment while the investigation is ongoing.

 

A CoStar Group spokesperson confirmed that its UK team is “cooperating fully” with the CMA, adding: “We are happy to provide the CMA with assistance.

 

“We are surprised at the CMA’s interest in a long-standing hotel data analytics and benchmarking platform, that for decades has been used by companies and government entities alike to better assess market dynamics.”

 

CoStar also pointed to a separate civil class action into hotel room pricing filed last year in the US, which was also focused on STR hospitality. This was dismissed by a federal court last year at the outset, with the court finding that there were no allegations supporting the sharing of hotel room prices.

 

The same court is currently considering a motion to dismiss an amended complaint.