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Hotel chains and discount holiday sites have been accused of getting together to fix prices and rip off consumers. A number of major holiday sites, including Expedia and Booking.com have allegedly joined forces with hotel chains to protect their profit margins and ensure ‘discount’ rates remain the same as normal tariffs.
The CEO of Skoosh, Dorian Harris said he was forced out of the market after trying to undercut the bigger companies in the sector. Mr Harris even claimed that he was threatened with violence by hoteliers angry at the possibility of their rooms being sold at a lower price.
It’s thought that a number of hotels wanted to keep prices high to protect their reputation. He claims that the hotels they offered deals with forced him to mark up prices, losing 70% of his business.
Mr Harris told the Sunday Times: ‘We started getting some calls from angry and confused hoteliers insisting that we were selling their rooms too cheaply ... I realised a [rival] website had been on to them threatening all sorts of nonsense if they didn't either remove their hotel from Skoosh or force Skoosh to raise its prices.” A recorded phone conversation with one hotelier saw My Harris being threatened should he ever visit Prague.
The Office of Fair Trading (OFT) is now looking into the claims to see if any laws have been broken. Anti-competitive measures such as price fixing are considered illegal and can even result in a prison sentence in the UK. Apparently many firms know that the practice is happening, according to a source, although the OFT declined to comment while the investigation is ongoing. Whatever the outcome, it doesn’t look like great news for the consumer who thought they were getting a good deal on a holiday. However, it should be remembered that you can still get a good deal on your travel insurance, if you know where to look.
Date Created: 17/09/2013