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The UK’s Office of Fair Trading is taking steps to ensure that online travel agencies such as Booking.com and Expedia, and hotels such as InterContinental have more freedom to offer discounted room rates, but only to closed groups of their users.
The OFT today opened a commentary period, which would run through January 17, 2014, on the latest proposed amendments to draft commitments by the parties that the OFT revealed over the summer.
The background to the issue is that the UK regulator was concerned that InterContinental’s agreements with Expedia and Booking.com precluded the OTAs from offering travelers discounts off published rates that InterContinental offers its own customers.
The latest proposed amendments would allow both OTAs and hotels to offer discounts to closed groups of their respective customers as long as they don’t advertise or otherwise publicize these discounts to the general public.
This sort of thing is similar to the manner in which airlines offer discounted airfares to subsets of their loyalty program members without offering them openly to the general public.
The OFT’s deliberations and the proposed amendments do not address rate parity and most-favored nation provisions in hotel-OTA agreements that ensure that OTAs and hotels offer the same published rates and that the hotels don’t give special preferred rates, availability and cancelation provisions to one booking site over another.
Rate parity and most-favored nation provisions have set off competition debates, lawsuits and regulatory inquiries in Europe and the U.S., but are not the focus of the current OFT deliberations.
The amended rules in the UK under discussion would apply to European Economic Area residents booking UK hotels, and would not apply to hotels in other European countries or to other regions of the world.