Hotel prices could fall after website taken to task by watchdog
Investigation found some aspects of Booking.com’s arrangements restricted price competition
Irish hotel prices could start to fall after Europe’s largest online travel agent platform was rapped over the knuckles and forced to change its policies here by the consumer watchdog.
The intervention of the Competition and Consumer Protection Commission (CCPC) into the pricing model adopted by Booking. com comes in the wake of an investigation that found some aspects of its arrangements with Irish hotels restricted price competition and risked infringing both Irish and EU competition law.
Specifically, Booking.com offered a “Best Price Guarantee”, which saw it promise to match lower rates for the same hotel rooms found elsewhere.
On the surface it seemed like a good deal for consumers, but it was underpinned by a “Price Parity” agreement that prevented hotels hosted by Booking.com from offering lower prices through other online travel agents, other marketing channels or directly to consumers.
The commission decided this agreement meant the site’s “Best Price Guarantee” was based not on open competition across different channels but on an underlying agreement on the part of hotels not to undercut their prices.
The consumer agency has secured a commitment from Booking.com that it will allow accommodation providers in Ireland to offer cheaper rates through different online travel agents and to consumers who contact them directly.
“The commitments secured from Booking.com will enable increased competition amongst businesses operating in this sector, benefitting the businesses concerned and also consumers,” said Isolde Goggin, the chairperson of the CCPC. “The commission’s mission is to make markets work better for both consumers and businesses and removing barriers to competition is an important part of this work.”
Ms Goggin said consumers “may believe that using one travel website will guarantee them the cheapest rate but this is not always the case. As well as checking the cost of accommodation on a travel site, it is also worthwhile contacting the hotel directly to see if you can secure a better deal.”
The commission’s action has occurred alongside a number of investigations across Europe by other authorities.
The commitments that the commission has secured apply to the relevant terms and conditions between Booking.com and hotels in Ireland for the next five years.