The Office of Fair Trading (OFT) announced yesterday it will investigate allegations the hotel giant, which operates the Holiday Inn, InterContinetal Hotels, Crowne Plaza brands, and is the largest global hotel group by room numbers, has been restricting prices via certain retail sites Expedia and Booking.com at various points since 2007.
The OFT alleges that Booking.com and Expedia each entered into separate arrangements with IHG which restricted the online travel agents ability to discount the price of room only hotel accommodation.
The formal investigation was initiated in September 2010, following a complaint by a small online travel agent, which said it was being prevented by various hotel chains from offering discounted sale prices for room only hotel accommodation.
The regulator says it has limited the scope of its investigation to a small number of major companies, with a view to achieving a swift and effective outcome, but it believes the alleged practices are ‘potentially widespread in the industry.’
OFT chief executive Clive Maxwell says: “We want people to benefit fully from being able to shop around online and get a better deal from discounters that are prepared to share their commission with customers. The OFT’s provisional view is that Booking.com, Expedia and InterContinental Hotels Group have infringed competition law.”
In a statement responding to the allegations IHG said it “considers its arrangements with the online booking agents to be compliant with competition laws and consistent with the long-standing approach of the global hotel industry.”
It added it was cooperating fully with the OFT’s investigation. IHG, Booking and Expedia will now have an opportunity to respond to the allegation before a final ruling on whether anti-competitive practices have taken place is made.