Several large international hotel chains are reportedly the subject of a price-fixing investigation by the UK Office of Fair Trading.
Starwood Hotels & Resorts Worldwide, Millennium & Copthorne Hotels, Radisson Edwardian Hotels and Guoman Thistle are among the companies being investigated by OFT for allegedly ordering online travel agencies to abide by minimum rate rules, The Telegraph reports.
According to The Telegraph, OFT investigators have emails from representatives of the hotel companies to various OTAs and travel agents insisting they not sell rooms for less than agreed-upon rates. If the allegations are confirmed, the OFT could levy fines of up to 10% of companies’ revenue. The investigation remains in the early stages, authorities say.
Rate parity is common practice across the hotel industry—it is a crucial component of the best rate guarantees offered by most major companies—but its legality is in question in the UK and Europe, as critics view it as a form of cartel operation.
A spokeswoman for Starwood tells HOTELS: “Starwood Hotels & Resorts refutes these allegations. Starwood has not been contacted by the Office of Fair Trading but is willing to assist with any information they require. Starwood requires its properties to comply with laws in all markets in which we do business.”
Representatives for M&C, Edwardian and Guoman did not immediately respond to requests for comment from HOTELS. However, M&C tells The Telegraph that it complies with all local laws, and Guoman says its pricing policies are compliant with UK and European Union competition laws.
Starwood Hotels & Resorts Worldwide, Millennium & Copthorne Hotels, Radisson Edwardian Hotels and Guoman Thistle are among the companies being investigated by OFT for allegedly ordering online travel agencies to abide by minimum rate rules, The Telegraph reports.
According to The Telegraph, OFT investigators have emails from representatives of the hotel companies to various OTAs and travel agents insisting they not sell rooms for less than agreed-upon rates. If the allegations are confirmed, the OFT could levy fines of up to 10% of companies’ revenue. The investigation remains in the early stages, authorities say.
Rate parity is common practice across the hotel industry—it is a crucial component of the best rate guarantees offered by most major companies—but its legality is in question in the UK and Europe, as critics view it as a form of cartel operation.
A spokeswoman for Starwood tells HOTELS: “Starwood Hotels & Resorts refutes these allegations. Starwood has not been contacted by the Office of Fair Trading but is willing to assist with any information they require. Starwood requires its properties to comply with laws in all markets in which we do business.”
Representatives for M&C, Edwardian and Guoman did not immediately respond to requests for comment from HOTELS. However, M&C tells The Telegraph that it complies with all local laws, and Guoman says its pricing policies are compliant with UK and European Union competition laws.