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David Tarsh • 3 years ago

Over the past few years, ETOA has provided regular seminars on this topic with a top law firm and, at all of them, it has been apparent that pricing parity could be seen to be dangerously close to price fixing, which is illegal and can result in the companies involved being subject to fines of up to 10% of worldwide turnover!

Paul Sawbridge • 3 years ago

This is a good and long overdue decision. It is not about the net rate charged to a trade customer but about the gross rate charged to the retail customer. It is ridiculous to insist that a retail customer be charged the same tariff by a supplier who insists on a 15% margin as by one who insists on an 8% margin. How long will we have to wait before we get an equally sensible judgement in a UK court?

hotelguy • 3 years ago

I think you're looking at it wrong. If a hotel could physically remove hotel rooms from the property and hand them to sellers, then the sellers should be able to sell them at whatever price they want. This is not the case, however. A hotel holds it's own inventory, and travel agents both online and in person, act as agents for the hotel. The hotel says to the agents: I have 20 x $500 rooms, if you sell them, I will pay you a commission, or you can take your commission out of the rate. The $500 hotel room is still a $500 hotel room, regardless of who sells it. Real estate agents don't take their cut of the sale until after the sale, and it's up to the client what the sale price is. It's the same for hotels.
As for margins and commissions, this also the same as in real estate. Agents who produce more, typically charge a higher percentage, as they rightfully should.
This decision, however, I firmly agree with. Expedia margins are far too high for what they do (up to 25% or even more), and it actually hurts the hotels, cutting into their operating costs. It should be up to the hotel how many rooms they want to allow Expedia or any other OTA to sell and at what price. If a hotel doesn't agree to offer consumer rate parity, then the OTA can move them down the list and not sell as much. Either way, OTA's need to start realizing that they are agents, contracted by hotels to sell their rooms. They are not supposed to be deciding prices. That's the hotel's job. Period.

Peter • 3 years ago

Very very wrong decision, the approach by Expedia is perfectly normal. With over 40 years contracting experience if I was not shown the prices given to say Thomson - Cooks - Cosmos etrc by the hotel to ensure I was not being screwed, I simply left to find properties where I did not have such competition. But then what do you expect in France ?