In response to increasing scrutiny of rate parity clauses, earlier this week a prominent OTA announced that they would roll out narrow price parity agreements across Europe. Narrow rate parity prevents hotels from offering a lower public room rate on their own website than the rate given to the online travel agent to sell the room.
On behalf of its members, the BHA has been actively lobbying the UK and the EU to support fair commercial practices that provide consumers with access to the best deals when making room bookings online. Earlier this year the BHA submitted a full report to the French Competition Commission calling on regulators to promote a more competitive landscape by banning rate parity clauses in contracts with intermediaries such as OTAs. These restrictive clauses make it impossible for hotels to offer their customers lower prices on their own websites compared to rates advertised through OTAs. Removing rate parity clauses will give hoteliers the freedom to promote their own deals for customers on their own websites.
Jackie Grech, Legal and Policy Director at the British Hospitality Association, said: “Hotels are handcuffed by rate parity clauses and restricted from offering the best deals to customers on their own hotel websites. As an industry, we work with OTAs as they provide an important service to enable hotels, especially smaller establishments and independents, to attract bookings that they potentially wouldn’t bring in on their own, but the fees for using OTAs are significant – sometimes over 20% of the whole room fee per night and that’s why we believe that where hotels can attract direct bookings to their own websites, they shouldn’t be restricted from doing so.
Jackie Grech concluded: “Narrow rate parity does little to return freedom to the market. We all benefit from an open market, especially customers who will see lower prices and greater innovation. We all want the same thing: a competitive and innovative market for hospitality and tourism, narrow rate parity misses the mark in aiding that goal.”