Hotels in price fixing scandal

by Ella FAIRCHILD on April 27, 2011

Three major hotel brands are being accused of fixing prices to keep room costs high. Thistle, Starwood and Radisson have been named and shamed by a national newspaper which claims they made deals with online travel agents to ensure that room rates stayed higher than they needed to be.

The paper claims that guests have been charged hundreds of pounds more than necessary, prompting an investigation by the Office of Fair Trading (OFT). The hotels could be hit with huge fines if found to have been acting illegally.

According to the Daily Telegraph, the hotels have set up a policy with online travel agents known as ‘rate parity’, which meant they charged set prices for rooms rather than offering discounts. The system meant that a price war is avoided, with all agents charging exactly the same amount.

According to the reports, the system is policed by the hotels themselves who ensure no one is offering their rooms for any cheaper. Unfortunately, it is only the guests who lose out.

An online travel agent, which had apparently fallen foul of the system, complained to the OFT and started the investigation, according to reports. Dorian Harris, who runs the Skoosh website, said she received many emails complaining about her offering discounted room rates.

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