New analysis of the use of price clauses for booking platforms

By assistant attorney Andreas Riis Madsen

In 2018, the Danish Competition and Consumer Authority – at the request of the Danish Minister for Industry, Business and Financial Affairs – did an analysis of the conditions for hotels and consumers in relation to online booking platforms. 

Changing of booking platforms’ price clauses in 2015

Before 2015, booking platforms’ price clauses prevented hotels from offering more favourable terms via other sales channels. A number of European competition authorities – among them the Danish Competition and Consumer Authority – were concerned about these “broad” price clauses. 

In April 2015, Booking.com committed to the French, Swedish, and Italian competition authorities to changing the clauses. The commitments were drafted with the assistance of the European Commission. Booking.com proceeded to amend its terms throughout all EU Member States, and Expedia (hotels.com and Trivago) followed suit, matching Booking.com’s changes.

With these changes, hotels were allowed, from 2015 onwards, to offer reduced prices via other sales channels, just not on their own websites. Consumers remain free, however, to call the hotels to negotiate cheaper prices themselves.

After the new “narrow” price clauses were introduced, therefore, hotels are allowed to offer different prices on different booking platforms. The analysis by the Danish Competition and Consumer Authority shows that among 35 hotels surveyed in 2018, around half were charging different prices on different platforms. That number has gone up since 2017, when a similar survey revealed that no less than 71 per cent of hotels surveyed always charged the same price on all booking platforms.  The analysis therefore seems to indicate that hotels are now more inclined to vary prices across platforms.

Still, the analysis also shows that 40 per cent of hotels in Denmark do not know that the booking platform clauses were changed in 2015 to permit different prices on different platforms. The Danish Competition and Consumer Authority has previously announced that it will seek to raise awareness among hotels of their possibilities for varying prices under the new clauses. After the analysis, the Danish Minister for Industry, Business and Financial Affairs has asked the Authority to step up these efforts so that more hotels learn about the new possibilities.

Read the analysis of the Danish Competition and Consumer Authority (in Danish).

Read more about the competition authorities’ focus on the hotel booking industry in our previous news article:

• The Danish Competition and Consumer Authority focuses its attention on hotel booking platforms