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ACCC Investigation Clears Way For More Competitive Hotel Bookings

ACCC Investigation Clears Way For More Competitive Hotel Bookings

An Australian Competition and Consumer Commission (ACCC) investigation has cleared the way for more competitive hotel bookings, with Expedia and Booking.com having agreed to amend contracts with Australian hotels.

The ACCC has advised that “Expedia and Booking.com have each reached agreement to amend price and availability parity clauses in their contracts with Australian hotels and accommodation providers”.

The ACCC stated that the agreements extend to online travel sites including Booking.com, Wotif.com, Hotels.com and Expedia.com, removing “barriers to price competition between major online travel sites for hotel bookings”.

“Parity clauses generally require accommodation providers to offer best price and availability to online travel sites,” the ACCC advised.

“This guarantees the online travel site the accommodation provider’s lowest rate and prevents competitors and consumers from negotiating better deals directly with the provider.”

ACCC chairman Rod Sims stated that the investigation had commenced “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,” Sims stated.

“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.”

A range of targeted market inquiries were conducted by the ACCC, including an online questionnaire to Australian accommodation providers, with it identifying the key issues as the use of broad price parity and room availability clauses by online travel sites after reviewing over 500 responses and speaking with industry participants.

“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,” Sims commented.

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