The UK Office of Fair Trading (OFT) has launched an investigation into alleged price fixing in the online sale of hotel rooms following a complaint by Skoosh.com.
The discount hotel room website reported that it was being pressurised to offer rooms at a standard price.
Dorain Skoosh, speaking on behalf of the site told reporters that hotels were threatening ‘legal action’.
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The practice of keeping prices at a pre-set level, otherwise known as rate parity, is common in the hotel industry.
However, the investigation will focus on alleged agreements and concerted practices resulting in fixed prices.
If the OFT finds that there have been breaches of the UK’s Competition Act, it can impose penalties of up to 10% of a company's turnover and would have considerable impact on the way hotel rooms are distributed.
Hotel groups use discounted online sales sites to drive occupancy figures at the cost of rates.
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