The Competition and Markets Authority (CMA) has launched an investigation into suspected sharing of ‘competitively sensitive information’ among hotel chains Hilton, IHG Hotels and Marriott.
The UK competition watchdog is looking into whether the chains colluded over pricing through the use of the hotel data analytics tool STR, which is owned by CoStar. All four businesses are under investigation.
It is standard industry practice for hotels to use various types of data analytics tools and algorithms to help them make commercial decisions. However, the CMA says that when rival businesses share competitively sensitive information – including through a third-party data analytics provider – this ‘reduces the uncertainty competing businesses normally have about how each other will act’.
Essentially, this means businesses may be able to coordinate on pricing or easily be able to predict each other’s behaviour.
The CMA said the investigation reflects its wider commitment to ensuring new technologies support fair competition and do not harm consumers. For example, it has recently published guidance on how businesses using algorithms can stay on the right side of the law.
A spokesperson from CoStar Group told Boutique Hotelier: “We can confirm that our UK team is co-operating fully with the UK Competition and Markets Authority, which we understand has opened an initial investigation into the sharing of information among hotel operators. We are happy to provide the CMA with assistance.
“We are surprised at the CMA’s interest in a long-standing hotel data analytics and benchmarking platform, that for decades has been used by companies and government entities alike to better assess market dynamics. Meanwhile we remain focused on delivering best-in-class, pro-competitive products and services to our customers in the UK and beyond.”
At this stage, no assumptions should be made about whether the law has been broken.
