News that the French government is likely to bring in new legislation to ban rate parity clauses in contracts between hoteliers and Online Travel Agents (OTAs) has been welcomed by the British Hospitality Association (BHA).
The proposed law, which still has to go through the French Senate in the coming weeks, will allow customers to shop around for the best hotel room price rather than seeing only one price across all websites.
The BHA has been actively lobbying in the UK and in other parts of Europe to support “fair commercial practices” in the hotel booking sector.
The organisation submitted a full report to the French Competition Commission in January calling on it to promote competition by prohibiting rate parity.
Jackie Grech, the BHA’s legal and policy director, said: “Our reason was simple, rate parity restricts competition and prevents consumers from shopping around and finding lower prices.
“If rate parity clauses were banned then hotels could offer lower public rates for direct bookings.
“As an industry, we work with OTAs and are happy to pay for the service of driving bookings that we wouldn’t attract on our own.
“However, for customers that the hotels could attract directly through offers, loyalty, search results, recommendations and reviews, the hotel is able to save a significant commission fee.
“The French legislative decision will free up the market by restoring competitive pricing to customers and encouraging customers to shop around for the best deal.”
Grech added: “The BHA commends the French Assembly for taking this move and encourages the French Senate to follow suit when they vote on this matter in two weeks’ time.
“With Germany and France taking a clear stance on rate parity, we look to the EU and the Competition and Markets Authority in the UK to harmonise the cross-border position and allow customers and businesses to benefit from a fair and competitive market for online hotel booking.”
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