Legal expert warns hotels and operators could be breaking competition laws
Tour operators and hoteliers could be falling foul of competition laws, according to legal experts.
The issue will be the subject of discussions at next month’s European Tour Operators Association (ETOA) annual conference at the Copthorne Tara Hotel in Kensington.
At the November 6 conference, Neil Baylis, an expert in European competition law from the law firm K&L Gates, will explain what is and what is not lawful.
“The most serious infringements relate to pricing,†he explained.
“In my professional experience many companies don’t appreciate what constitutes price fixing neither do they realise the extent of the law and the full consequences of transgressing.â€
With increasing levels of sales being made through hotels’ own websites and as much as 40% of rooms are now sold directly, he will explore whether it is lawful for hotels to ask an operator not to publish a rate lower than their own.
Baylis will tell delegates whether such an agreement constitutes price fixing and, if so, what are the penalties.
ETOA executive director Tom Jenkins said: “The implications of these questions are profound. The answers could affect the way the hotel industry organises itself and the freedom intermediaries have to sell hotel accommodation at a discount.
“What I think many people fail to grasp is that, when the law is broken, both the hotel and the tour operator are deemed guilty.â€
Penalties for anti competitive practices can be so stringent – up to 10% of the offender’s global turnover – that they could jeopardise the viability of the business.
By Bev Fearis
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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