11 Reasons Why The World Of Hotel Booking Is About To Change Forever
Skift Take
This agreement between InterContinental Hotels, and Expedia and Booking.com is game-changing not for its short-term impact, but for the more far-reaching reverberations, and new regulatory actions that it will ultimately lead to.
The UK's Office of Fair Trading entered into a landmark hotel-rate agreement, subject to final approval, with InterContinental Hotels Group, Booking.com and Expedia that would apply to all online travel agencies and hotels servicing UK travelers through the European Union. The full PDF of the ruling, embedded at the end of the story.
What is the agreement?
Instead of the current practice where online travel agencies are prohibited from offering rooms at rates lower than the pricing on hotels' own websites, OTAs under the 3-year pact would now be able to offer UK travelers, who are members of their loyalty programs or other "closed groups," vouchers, rewards, cash back and other discounts off the rate on the hotel website.
The OTAs would fund these discounts from their hotel commissions and margins, and the OFT believes this would finally inject some price competition, where it has been sorely lacking.
What are the Implications of the Agreement?
Limited Competition
1. The agreement would indeed spark some price competition, but in a limited way, and behind closed doors. OTAs would not be permitted
