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IHG Agrees to Give Pricing Power Back to OTAs

IHG Agrees to Give Pricing Power Back to OTAs

After accusations last year by the Office of Fair Trade (OFT) Intercontinental Hotels Group (IHG) has reached an agreement with Expedia.com and Priceline’s Booking.com to allow the online travel agents (OTAs) more control over pricing.

After an investigation last year, the OFT concluded that contracts between the hotel chain and the OTAs that limited Booking.com and Expedia from cutting their prices below those offered on IHG brand websites were limiting competition.

The agreement reached Friday allows for Expedia and Priceline to once again cut their rates below those offered by the hotel chain, but only for certain customer segments, including loyalty customers, or customers who have already booked through the agent’s channels. This allows for IHG to maintain control over pricing for first-time customers.

Currently, the agreement only pertains to IHG-branded hotels in the UK, but there will likely be pressure for the companies to expand these provisions in other countries including the U.S. and the rest of Europe, where there are currently price-fixing lawsuits against several hotel brands and OTAs regarding fair pricing.

OFT opened a consultation on commitments which will remain open for comment until Sept. 13.

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