Online hotel bookings to be probed for price-fixing

It's never bothered me.

I've known about this practise for a long time. Technically it is not price fixing. The hotels set the retail price and all outlets have to sell at the same price, but some may have different commission levels. It's no different to selling books. Obviously many hotel bookings are bundled into a packages and in this case you can get the rooms cheaper but only as part of a package. When I book a hotel, I know that the price is going to be the same everywhere, so I don't waste time looking at different prices, I often book directly with the hotel and sometime you get a better service because the hotel makes more profit out of your booking!

Nothing new here...

Their are many suppliers who remove thier products from retailers who sell below the rrp, its in a lot of supply contracts.

Question is where is the colusion? price fixing requires competitors to agree prices not resellers and suppliers. If this were a case of [hotel and hotel] or [reseller and reseller] there may be a case but at present I think not.

They really need to ban supermarkets from using 'price watch' tactics, I dont see that as helpful. I see it as price matching, or price fixing. In reality they could sell it cheaper, but because the competition does not they do not. hence the price is fixed (or pegged to the competition).

Not online that's the problems

My mum recently had a hotel ring her up to cancel my mum and dad's holiday booking at the last minute because they'd decided to refurbish instead. But never fear! Here, have a voucher for a 30% discount next time you book with us...

So my mum checks online 3 months later (having rearranged their holiday plans) and see's it's 50 quid a night. Excellent she thinks, I can have 3 nights for 100 quid. So because she can't use the voucher online as it came direct from the hotel, she rings up and tries to book. "Ok, for three nights that's...159 quid please" says the woman.. My mum explained that she had a voucher and the hotelier told her that the price included the 30% discount. When my mum queried how that was mathematically possible the only response was that "They do deals online sometimes..."

Mum told them to get stuffed, i'm never booking with you again - you're incompetent and tried to forget about it, but they're now being hounded by head office trying to get a statement for "An internal investigation..."

Spooky.

Good

Always a positive for the consumer.

Brief guide to buying a room

Tiny bit off-topic but meh.

Sounds a bit strange but the industry calls it selling rooms so remember you are buying a ROOM for a defined period.

Strange emphasis you may think? Well internally the industry is totally focused on occupancy rate. Selling guests other products is secondary - obviously as you can't sell people stuff when they're elsewhere. Every GM in every chain is verging on paranoiac regarding occupancy rates. To anyone in the industry - yes I know the other metrics but if your occupancy rates are consistently below competing hotels then you're toast anyway.

So if you can't move the hotel on room rate alone then consider the bar/restaurant to get a decent deal. Hotels will typically make a 300% gross margin on food/drink and in most cases the main revenue cost driver is labour - ie you need bar/restaurant staff anyway so you can do deals there easily. Apart from anything else hotels love doing deals that keep customers on-site - both for revenue reasons and for CRM reasons.

Even budget hotels will do deals - and by "budget" I mean hotels that routinely sell at £30-40.

Use webscraping rates as a bargaining tool - in most cases reception staff will have no clue what the hotel is charging online, head receptionist will though. He/she is the one who will know.

There's really no reason (other than events) to pay the asking price for hotel rooms in the UK. If the staff can't move on price then go for a meal bundled in (if you know chain/hotel). Other possibilities are free movies on demand/internet.

A lot of the time you'll find that due to beancounter metric nonsense the hotel will throw in meals rather than reduce rates. Abuse it ;)

"John Naismith ... claims to be a hotelier"

Does he? I don't see that particular claim anywhere ? However, let's put that to one side.

He does however remind me of a John Naismith whose IT-related contributions I have read elsewhere, a gentleman with quite strongly held opinions. Maybe his knowledge of this field comes from the IT side of things rather than the hotel side of things?

As others have already pointed out, he's definitely wrong about Laterooms payment mechanism here, and anyone who doubts that can refer to the Laterooms website, where on the front page it says: "And we'll never, ever charge you a booking fee, whether you're going for business, pleasure, or just a decent night's sleep. Just book online or by phone, secure the booking with a credit card and pay the hotel on departure."

PAY THE HOTEL ON DEPARTURE, it says.

John's also wrong (in my experience over several years) about the practicality of contacting Laterooms in an evening; they've never let me down as a customer, either before or after the TUI takeover.

I also know a little about the hotelier's side of Laterooms, as an acquaintance over some years of a small independent hotelier who used to rely (quite happily) on laterooms.

I'm still interested in knowing how Laterooms actually make money.

Where the anti-competiveness really lies.

As a hotelier I can confirm that you should always be able to get the best rates and up to date availability by calling the hotel directly.

If we need to take £50 for a room as a minimum, then on Laterooms for example, we would need to advertise at £59 to cover their commission charges. Whereas, another online agency may charge less commission and we could for example advertise on their website for £55.

However, Laterooms and others are insisting that they get the cheapest rate available anywhere on the web, a practise that is surely an abuse of their position.

The agency that is adverising at £55 is working on 9% commission and Laterooms or one of the other big agencies is working on 15%.

By insisting that they get the cheapest rate and given the hotelier needs £50, it is forcing the price to be £59 and not allowing the smaller agency (Skoosh perhaps?) to be competitive and advertise at a lower rate.

That is anti-competitve! It is an abuse of power by the big guys to stop the little guys competing.

Of course if you phone directly to the hotel the price you should be looking for is £50. Now armed with that knowledge, just pick up the phone.

Dorian Harris and a desperate attempt . . .

Stunned to read Mr. Harris' statement that price parity represents the equivalent to price fixing. As CEO and owner of an online travel site he should know better, and probably does. For me it sounds like a very smart PR effort desperately trying to convince the media and his likely declining customer base that Skoosh provides the lowest rates; so low that hoteliers call him begging to raise his rates! Nice try.