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Hong Kong regulator accepts OTA giants' pledge to drop rate parity

05/14/2020| 2:38:21 PM| ChinaTravelNews 中文

Booking.com, Expedia and Trip.com Group have vowed to remove their rate-parity contract terms with accommodation providers in Hong Kong.

The Competition Commission of Hong Kong said it has accepted the voluntary commitments by Booking.com, Expedia and Trip.com Group, the world's three largest online travel agencies, to amend their rate-parity contract terms with local accommodation providers in the city. 

The competition watchdog previously expressed its concerns around the rate-parity clauses in the travel agencies' existing and future contracts, including the parity of hotel-room prices, conditions and availability. These clauses require accommodation providers to always give the OTA the same or better terms as those they offer in all other sales channels.

The Commission considers that these clauses have the potential effect of softening competition among OTAs, as well as hindering entry and expansion by new or smaller OTAs, depriving consumers of the benefits of effective competition.

In response to regulatory concerns, the three OTAs offered to amend these rate-parity clauses. Each of the OTAs has 90 calendar days to amend their existing and future contracts for compliance with the commitments.

The acceptance of the commitments would result in the complete removal of these clauses and thus address the Commission’s concerns raised in its investigation, according to an announcement by the competition authority. 

Read the announcement

TAGS: Trip.com Group | Booking.com | Expedia
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