The hotels in France are taking a stand against Rate Parity. They have registered official complaints with France’s competition authority against three major booking sites.
French hotels take on online booking firms
French hotels launched an attack on three of the world's biggest online booking firms, saying they are unfairly twisting their arm on prices by banning them from offering reductions or taking bookings direct.
France’s biggest hotel employer's union, UMIH, argues that Booking.com – the largest online hotel reservation website in the world – Expedia and HRS, are breaking French and European competition rules by forcing hotels to give them their lowest rates, and then barring them from offering discounted rates elsewhere, including on the hotels' own websites.
France is not the first to complain about the issue. The Swiss Competition Commission also launched an investigation of the same websites in December 2012. In July 2012 the UK Office of Fair Trading accused Expedia, Booking.com and InterContinental Hotels Group of signing deals that limit discounts that can be offered to customers. (read article here)
A class action lawsuit was also filed by consumers in the US in August 2012 regarding a claim of OTA/Hotel price fixing.
In the article, Rate parity: should it stay or should it go? even the customers are thought to lose when it comes to rate parity.
From the consumer’s perspective, especially the savvy ones, it makes no sense to them that they have to pay the same amount when they book directly to a hotel versus when they book via a third-party retail source. The consumers know that hotels pay commissions to these third-party players and cannot logically fathom why these `commission savings’ are not passed down to them
Interestingly enough, the origins of rate parity came from hotels as a way to ensure that the OTAs wouldn't charge lower prices than the hotel's own website. Now it has turned around to restrict the accommodation providers instead.
As more hotels in more countries join this fight, the pressure on the OTAs grows. (of course, more pressure would be applied by simply removing the room inventory instead, like American Airlines did from Expedia in 2010) If the fair trading organizations decide that rate parity practices are not legal, this could have a big effect on the entire travel industry.
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