The UK's Competition and Markets Authority (CMA) has launched a formal investigation into three of the world's largest hotel groups – Hilton, InterContinental Hotels Group (IHG), and Marriott – over allegations they may have shared "competitively sensitive" information. This probe centers on suspicions that the companies, which collectively operate more than 25,000 hotels globally, could be exchanging data through the analytics platform STR, owned by real estate data firm CoStar, which is also under scrutiny.
Focus on Data Analytics and Market Coordination
While hotel chains commonly use data analytics and algorithms to set prices, potentially enhancing competition and reducing costs, the CMA emphasizes that sharing such information with rivals can undermine market dynamics. The regulator stated that when competitors exchange sensitive data, even via third-party providers, it diminishes the uncertainty that typically drives healthy competition. This can facilitate coordination among businesses, allowing them to predict each other's actions and adjust their strategies accordingly, potentially harming consumers through reduced choice or higher prices.
Investigation Timeline and Market Impact
The CMA plans to spend the next six months gathering evidence as part of this inquiry. In early trading on Monday, shares in FTSE 100-listed IHG fell by up to 5%, reflecting investor concerns over the investigation's implications. CoStar, based in Washington DC, provides key industry metrics such as occupancy rates, average daily room rates, and revenue per available room, tools that help hotels optimize pricing and manage supply-demand balance.
No conclusions have been drawn at this stage, with the CMA noting that it should not be assumed any laws have been broken. If provisional findings indicate infringement, the regulator may issue a statement of objections. A CoStar spokesperson expressed surprise at the CMA's interest in its long-standing analytics platform, used by companies and governments for decades to assess market trends, while confirming cooperation with the inquiry. IHG, headquartered in Windsor, England, with over 400,000 employees worldwide, also pledged full cooperation.
Broader Regulatory Context
This investigation aligns with the CMA's broader commitment to ensuring that new technologies foster fair competition without disadvantaging consumers. In November, the regulator initiated probes into eight companies regarding online pricing practices, highlighting ongoing vigilance in digital markets. Hilton and Marriott have been approached for comment, but responses are pending as the inquiry unfolds.
