Hotel groups under scrutiny for possible price

UK Competition Authority Probes Major Hotel Chains Over Pricing Concerns

The Competition and Markets Authority (CMA) in the UK has initiated an inquiry into three leading global hotel groups—Hilton Worldwide, Intercontinental Hotels Group (IHG), and Marriott International—over suspicions of potential price coordination.

This investigation centers on allegations that these companies may have exchanged confidential information, enabling them to align their pricing strategies rather than compete independently.

At the heart of the probe is a data analytics platform known as STR, which monitors metrics such as hotel occupancy, average room rates, and revenue for approximately 94,000 hotels worldwide. STR is owned by CoStar Group, a major US-based property data company, which is also under scrutiny.

The CMA is examining whether such data-sharing tools allow competitors to access sensitive information without direct communication, potentially undermining fair competition.

Regulator’s Concerns and Warnings

According to the CMA, when rival businesses share information through these platforms, it can reduce the unpredictability of competitors’ actions, making it easier for companies to anticipate each other’s moves and potentially coordinate their behavior.

The authority has previously cautioned that using algorithms to monitor competitors’ prices or to signal pricing intentions can breach competition laws, even in the absence of direct discussions.

However, the CMA emphasized that, at this stage, there is no evidence of any legal violations. The regulator stated, “No conclusions should be drawn at this point regarding any breach of the law.”

The investigation will continue over the coming months, after which the CMA will determine whether to issue a formal notice outlining any suspected violations.

Profile of the Hotel Groups Involved

• IHG: Headquartered in Windsor and listed on the FTSE 100, IHG operates over 6,900 hotels globally under brands such as Holiday Inn, InterContinental, and Six Senses.
• Hilton: Based in the United States, Hilton manages more than 8,000 properties, including the Waldorf Astoria, DoubleTree, and Hampton Inn chains.
• Marriott: Also US-based, Marriott oversees a portfolio of over 9,000 hotels, featuring brands like Sheraton, W Hotels, and the Ritz-Carlton.

Combined, these three groups represent a significant share of the global hotel market, with tens of thousands of rooms worldwide.

Market Impact and Responses

Shares in IHG fell by 5% in early trading on Monday, with the company also affected by ongoing conflict in Iran, which has disrupted travel and tourism across the Middle East.

A spokesperson for CoStar Group stated that the company’s UK division is “fully cooperating” with the CMA and is “happy to assist with the investigation.” The spokesperson also expressed surprise at the regulator’s interest in a long-established analytics and benchmarking tool that has been widely used by both businesses and government agencies for decades to better understand market trends.

“Our focus remains on delivering top-tier, pro-competitive products and services to our clients in the UK and beyond,” the spokesperson added.

IHG has confirmed receipt of the CMA’s notification and pledged full cooperation with the inquiry. Hilton and Marriott have also been approached for comment.