offers to scrap rate parity clause

18 December 2014 by offers to scrap rate parity clause

Online travel agent has offered to scrap a practice that prevents hotels from giving discounts to rival OTAs.

The move is in response to investigations by competition authorities in France, Sweden and Italy, according to the European Commission. is thought to have made the decision in a bid to end the investigations into so-called "rate parity clauses" in contracts between online booking sites and hotels.

The European Commission said it was coordinating the national probes, which have come about as a result of complaints by competitors worries about the effect the practice has on competition.

" has proposed to abandon the parity requirement in respect of prices which the hotel makes available to other online travel agents," the Commission said in a statement.

However could still have clauses in its agreements with hotels that prevent the hotels from offering discounts or lower rates on their own websites.

Malcolm Lindop, head of contracting, at accommodation wholesaler JacTravel, said: "Whilst the Commission failed to compel to remove all the objectionable clauses in its contracts with hotels, this is a small but important step in the right direction. We need a dynamic, competitive market in which hoteliers and distributors are properly free to negotiate whatever terms they wish between themselves and are not spooked by the spectre of large players exerting undue pressure."

It now remains to be seen whether's offer will be accepted by the three national regulators currently conducting investigations. If it is, then the concession will be valid across Europe.

The UK's Competition and Markets Authority is also looking into the hotel online booking sector, after quashing a decision by its predecessor, the Office of Fair Trading, earlier this year to accept concessions from, Expedia and the InterContinental Hotels Group.

Judgement reserved on appeal against OFT investigation into illegal rate parity >>

OFT rooms discount ruling leaves hoteliers confused >>

OFT ‘minded to accept' price parity commitments >>

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