The number of discounted hotel rooms available online is set to soar following a ruling by the Office of Fair Trading.
The OFT’s decision follows a 2010 investigation, after which the OFT accused Expedia, Booking.com and the InterContinental Hotels Group of infringing competition law by signing deals that limit the discounts offered to consumers on rooms.
It said that between October 2007 and September 2010, the three travel firms had restricted other travel agents' ability to discount the price of room-only hotel accommodation.
Hotels are free to set their own room prices, but the OFT alleged that when selling rooms through the likes of Expedia and Booking.com, some hotel groups were dictating the prices those agents should charge. This had the effect of stifling competition and making it harder for smaller travel agents to compete.
Now, the OFT has come to an arrangement with Booking.com, Expedia and InterContinental that will enable all online travel agents and hotels that deal with the three firms to offer discounts off headline room-only rates.
However, the catch is that customers must sign up to the membership scheme of an online travel agent or hotel to be able to view the discounts, and they must make one undiscounted booking with firm in question before they can book a discounted room.
Ann Pope, senior director in the OFT's Services, Infrastructure and Public Markets Group, said: "The travel industry, fuelled by the internet, has seen significant changes in recent years, and we want to ensure those changes continue to work in consumers' interests.
"That is why we are pleased to have secured this outcome which, by allowing online travel agents and hotels to offer discounts, should increase competition and mean travellers across Europe can benefit from reductions on hotel accommodation throughout the UK. By shopping around, people can compare the different discounts offered by hotels and OTAs, and ensure they get the best deal."