OTA discounting
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| Hospitality Today | Feb / Mar 14
In response to the OFT’ s announcement, IHG released a statement:
“ IHG notes this morning’ s announcement from the OFT that following the completion of its public consultation it has decided to accept a series of commitments and bring an end to its investigation into the online supply of room only hotel accommodation by online travel agents.
We have worked closely with the OFT during the consultation period and are pleased that this process has now reached a conclusion without any finding of infringement or wrongdoing.”
IHG’ s rivals Hilton Worldwide were cautious in their response: Director of Corporate Communications, Europe Jules Kerby told Hospitality Today:
“ As always, guests can still book directly with Hilton Worldwide and enjoy our legendary hospitality from the first moment in the travel journey, whether via our mobile-enabled online channels, in person, on property or by phone. We do recognize, however, that some guests prefer to book via other channels, and so we plan to continue working with our OTA partners, pursuant to current terms that we believe comply with all applicable laws.”
Other major groups have told HT it is“ too early” to comment on the OFT ruling. All, however, are busy behind the scenes, thinking through how it will affect their business models.
The main outcome anticipated seems to be that hotels will not be able to set their retail selling prices, or offer a“ best price guarantee” for their own direct bookings, if they use an OTA; the OTA will be able to decide to use some of its commission to discount the room rate, perhaps below the rate at which the hotel itself sells to the end-user.
Hotel industry consultant Melvin Gold( above) told HT:
“ The OFT action is intended to protect consumer interests. The reality, as all hoteliers know, is that prices have always fluctuated with supply and demand and that different prices have typically pertained to different market segments or booking sources and at different times of the week or year. The big difference this seems to make is that it will make it more difficult for
What this means fo
by OFT Director Gaucho Rasmussen
OTA discounting
• If you are already dealing with Expedia and / or Booking. com, you should expect
them to get in touch with you over the next three months to get your agreement to allow them to offer discounts off your room-only rates to consumers who have signed up to a closed user group and have made one undiscounted booking
• In due course, we think it is likely that OTAs other than Booking. com and
Expedia will want to introduce similar discounting schemes for closed group members who have made a prior fullprice booking with them.