A plan by the world’s biggest online travel agencies, Booking.com and Expedia, to offer exclusive discounts on IHG properties has been declared anti-competitive by the Britain’s Competition and Markets Authority following a complaint by travel search engine Skyscanner.
Booking.com, Expedia and IHG had planned to offer exclusive discounted rates to consumers through a closed membership scheme.
Skyscanner argued this constituted anti-competitive behaviour because not everyone could access the rates.
It’s calling the ruling a victory for consumers however in reality it’s a much bigger win for Skyscanner, a fast-growing site that crawls OTAs and suppliers for the best deals which, if the closed user groups went ahead, would not have been available to it.
This would have undermined Skyscanner’s legitimacy as a deal finder and therefore its ability to attract customers against ‘frenemies’ such as Booking.com and Expedia, which advertise much of their inventory on the meta-search sites.
But another take is that the judgement itself is anti-competitive.
How? By effectively endorsing the entrenched industry practice of rate parity – ie hotels offering the same room rates and across all distribution points, including its own website and the OTAs.
Rate parity is controversial – some might call it price fixing- yet is rigorously enforced throughout the travel industry.
For example, the inventory of hotels that try to sell an exclusive rate are routinely withdrawn by OTAs until they are either given the deal or the property stops selling it.
The obvious consequence is that consumers find the same rate wherever they turn, and where is the competition in that?