Price-fixing probe may cost hotels millions

HOTELS have been accused of fixing room prices to overcharge customers by hundreds of pounds.

The Office of Fair Trading has launched a formal investigation after it received complaints about websites selling rooms at set prices.

Hotels are accused of secretly ordering travel agents and those running the sites not to offer rooms below a certain price, and banning those who do from selling rooms in future.

Demanding agents sell at a set level could be illegal under EU and UK competition law. Fines for those found guilty may run into tens of millions of pounds as the penalties can be up to 10 per cent of turnover.

The system of price-fixing is known as "rate parity" and means different websites and travel agents sell rooms at identical prices.

Rooms at several Scottish hotels, including some in the Thistle chain, were exactly the same price on different websites yesterday.

The OFT said it was continuing with a "formal investigation into suspected breaches of competition law in the hotel online booking sector".

In a statement, it said: "The investigation remains at a relatively early stage. However, after a preliminary review of the evidence gathered to date, the OFT continues to consider this matter as a priority and is pursuing the investigation further.

"The OFT will not be in a position to conclude whether it considers the law has been infringed until it has progressed its investigation further, including obtaining and assessing additional evidence.

However, the Radisson said it was "unequivocally" not involved in the OFT investigation and said it did not fix prices.

A spokeswoman said: "In fact, we pride ourselves in our total business transparency. We are not involved in any collusion with any organisation to set a price on room rates for any of our hotels and go to great lengths to ensure that there is a consistency across all booking channels for our clients."

A spokesman for Starwood said: "Starwood Hotels & Resorts required our properties to adhere to all legislation and takes this matter seriously.

"Starwood has not been contacted by the Office of Fair Trading but is willing to assist with any information they require."

A spokesman for Thistle and Guoman hotels said: "We are unable to comment on inquiries relating to specific room rates."