Insight

OTAs amend parity contract clauses

Expedia and Booking.com will amend price and availability parity clauses in their contracts with New Zealand accommodation providers to resolve a Commerce Commission investigation.

The parity clauses in question had required New Zealand accommodation providers to offer their best price and all their rooms to online travel sites operated by Expedia and Booking.com, including Wotif.com and Hotels.com.

The Commission was investigating whether these clauses were anti-competitive and prevented competing online sites from negotiating better deals directly with accommodation providers. 

Commission Chair Dr Mark Berry said the same concerns had been raised with Expedia and Booking.com in Australia and Europe, which resulted in each company amending their contracts. 

The Commission had been monitoring these international developments and engaged with Expedia and Booking.com about making the same contract amendments in New Zealand. 

“We are pleased that Expedia and Booking.com have decided to amend their contracts with accommodation providers as they have done overseas,” Dr Berry said. 

“The amendments mean accommodation providers can now offer lower rates or tailor special deals for walk-ins, telephone bookings or loyalty members that are separate to the prices they advertise online. They are also no longer required to offer all their rooms on Expedia or Booking.com websites.”

The Commission is not considering any further investigative action. Expedia and Booking.com will not put in place or enforce clauses that require accommodation providers to:

  • offer room rates that are equal to or lower than those offered on any other online travel agents’ website or through any offline channels
  • make all remaining room inventory available
  • offer the same type and number of rooms offered to any other online travel agent

The agreement has not removed the contractual requirement on accommodation providers to advertise rooms through their own or their group’s own website at a rate no lower than that offered through online sites owned by Expedia and Booking.com.

Commerce Commission Media Release, 28 October 2016