Holidaymakers are being overcharged hundreds of pounds because of a suspected hotel price-fixing scandal, The Daily Telegraph can disclose.
British holidaymakers are likely to have been overcharged
for hotel rooms because of a price-fixing scandal involving some of the world’s
biggest online travel companies, the Office of Fair Trading said yesterday
after an investigation by The Daily Telegraph.
Hotels were effectively banned from selling rooms cheaply,
with the huge global online travel agents accused of illicitly setting a
minimum price to stop their prices being undercut. Hotels refusing to use the
minimum price were threatened with removal from the sites.
Expedia, one of the world’s biggest online travel firms,
has admitted it has “engaged in cartel conduct on breach of the law”. It is now
co-operating fully with the investigation and is understood to be providing
information on its rivals under a “leniency deal”.
Clive Maxwell, the chief executive of the OFT, said the
watchdog was awaiting the firms response to the notices.
“We want people to benefit fully from being able to shop
around online and get a better deal from discounters that are prepared to share
their commission with customers,” said Mr Maxwell.
The OFT can fine companies up to ten per cent of annual
turnover worldwide if they are found to have breached competition law by fixing
An email to a website from a senior executive at Radisson
illustrated how the hotels tried to enforce “rate parity” so that all internet
sites offer the same price.
“Please REMOVE all Radisson Edwardian Hotel product from
your site as you are causing us online rate parity issues,” wrote Gail Jordan,
a sales director at the hotel company.
“We offer a best online rate guarantee, as do most
brands,” Miss Jordan said. “Same room type should be same price across all
Dorian Harris, who runs the online travel company Stoosh,
said he had made the complaint after becoming concerned about market
“Consumers are seeing best price guarantees on almost
every travel website nowadays.
“What they don’t realise is that these companies are only
able to confidently guarantee the best rates because they’ve precluded the
competition from discounting with legal threats,” said Mr Harris.
A spokesman for Expedia said: “Expedia remains committed
to ensuring that it provides consumers with the widest possible choice of
travel options at competitive prices and will seek to safeguard its ability to
continue to do so in relation to the current regulatory process.”
A spokesman for InterContinental said: “IHG considers its
arrangements with the online booking agents to be compliant with competition
laws and consistent with the long-standing approach of the global hotel
industry. IHG is cooperating fully with the OFT’s investigation.”
InterContinental also runs the Holiday Inn and Crowne Plaza
hotels. Booking.com declined to comment.
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