- UK competition watchdog investigates three major hotel chains for sharing competitive information.
- The CMA suspects Hilton, IHG, and Marriott use data tool STR to exchange sensitive details.
- Sharing competitor information can reduce competition and potentially harm hotel customers.
The Competition and Markets Authority has launched a formal inquiry into whether three major hotel chains improperly share competitive data. Hilton, InterContinental Hotels Group, and Marriott collectively manage over 25,000 hotels across the globe. Investigators suspect these companies exchange competitively sensitive information through STR, a data analytics platform. CoStar, the real estate firm that owns STR, is also facing scrutiny in this inquiry.
While using data analytics and pricing algorithms is standard practice in the hotel industry, and can benefit consumers through improved competition and lower rates, information sharing between rivals creates problems. When competitors exchange sensitive details, they reduce uncertainty about each other’s actions. This enables them to better predict competitor behavior and coordinate strategies in ways that harm customers.
The CMA explained its concerns directly: sharing competitive information eliminates the natural unpredictability that keeps businesses competing aggressively. This coordination can weaken competition across the industry. The investigation will proceed over the next 6 months as regulators gather evidence and examine whether any legal violations occurred.
CoStar provides hotels with standard industry metrics including occupancy rates, average room prices, and revenue measurements. This data helps companies set room charges and balance supply with customer demand. The company expressed surprise at the CMA’s investigation, noting that its platform has served companies and government agencies for decades. A CoStar spokesperson emphasized the firm is cooperating fully with regulators.
Market reaction was immediate, with IHG shares falling as much as 5% at the start of trading. The company, headquartered in Windsor with over 400,000 employees worldwide, pledged complete cooperation with the investigation. The CMA’s action reflects broader concerns about ensuring new technologies promote fair competition rather than harm consumers. The regulator previously opened 8 separate inquiries into online pricing practices in November.
