Australian watchdog deal on parity clauses on online hotel bookings

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  • Expedia, Booking.com have agreed to edit parity clauses i
  • OTAs include Booking.com, Expedia.com, Hotels.com and Wotif.com.

booking screengrabThe Australian Competition and Consumer Commission has negotiated with some of the larger hotel booking sites to partially remove price parity clauses from their contracts with Australian hotels. The parity clauses required the hoteliers to offer the best price and availability to the online site- preventing the hotel themselves for selling for less either directly to the consumer or to other competitors. This has been amended for telephone booking and walk-in customers, but not for online sales.

It follows challenges in Europe to OTA’s most favoured nation clauses which are also regarded as anti-competitive.

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The ACCC conducted inquiries including surveys of Australian hoteliers and accommodation providers, and speaking with those within the industry, before reaching the decision to target parity clauses by online travel sites.

Rod Sims

Rod Sims

ACCC Chairman Rod Sims said: “The ACCC commenced its investigation after accommodation providers raised a range of concerns, including that these parity clauses were anti-competitive as they stopped consumers from getting different prices from competing online sites. Australian accommodation providers will now be able to tailor their offers to better meet the needs of their customers and their own businesses requirements. They will now be able to offer lower rates through telephone bookings and walk-ins, offer special rates and deals to customer loyalty groups, in addition to offering deals via Expedia and Booking.com… The ACCC is pleased Booking.com and Expedia have agreed to amend the parity clauses in their contracts, because it will increase the incentive for them to compete with each other and allow consumers to shop around to get the best deal.”

richard munroRichard Munro from Tourism Accommodation Australia said: “The ACCC has seemingly overlooked the fact the internet is easily the number-one way consumers book accommodation… Effectively, this means the online travel agencies can still dictate – from their offshore headquarters – to small motels in regional Australia what price they can charge for providing a service, when many of these accommodation businesses are struggling to be profitable.”

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