OFT launches hotel price-fixing probe

22nd Apr 2011

The UK’s Office of Fair Trading has launched an investigation into price-fixing by hotels and travel agents, which has resulted in holidaymakers being overcharged by hundreds of pounds.

Companies including Radisson, Thistle and Starwood are being investigated by the OFT, according to The Daily Telegraph.

The hotel chains are alleged to have ordered travel agents not to offer discount prices to a number of properties around the world.

If they are found guilty of price fixing then they could face fines of up to ten percent of their turnover, which could run into tens of millions of pounds.

Hotels are accused of secretly ordering travel agents not to offer discounted rooms, according to leaked documents. Agents discounting below the secretly fixed prices are banned from selling rooms in future.


The scandal has allegedly stopped some agents reducing the price of hotel rooms at well-known properties around the world by up to 25 per cent.

The disclosure follows similar scandals within the airline industry, with a host of carriers recently forced to pay multi-million pound fines after admitting price fixing.

Hotels and online travel agents are suspected of secretly agreeing to “rate parity” – selling rooms at identical prices

A spokesman for the OFT said the investigation was at “a relatively early stage”.

He told The Telegraph: “After a preliminary review of the evidence gathered to date, the OFT continues to consider this matter as an administrative priority and is pursuing the investigation further.”

The OFT investigation is reported to have been initiated by Dorian Harris who runs Skoosh, a website selling hotel rooms. He contacted the OFT after allegedly being bombarded by requests from hotels that he stop offering their rooms on Skoosh.

But the hotel groups denied that they were breaking the law.

A spokesman for Starwood said: “Starwood Hotels & Resorts requires our properties to adhere to all legislation and takes this matter seriously. Starwood has not been contacted by the Office of Fair Trading but is willing to assist with any information they require.”

Copthorne & Millennium refused to comment on the emails, but said: “Our policy is to comply with all relevant legislation in all jurisdictions.”

A spokesman for Thistle and Guoman hotels said: “We are unable to comment on enquiries relating to specific room rates but can confirm that Thistle Hotels’ pricing policies are in line with UK and European competition law in the hotel online booking sector.”



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