Britain’s competition watchdog has launched a formal investigation into three of the world’s largest hotel groups, Hilton, InterContinental Hotels Group and Marriott International, over concerns they may have shared “competition-sensitive” information through a third-party data analytics platform.
The Competition and Markets Authority (CMA) said it was investigating whether the hotel operators shared commercially sensitive data using STR, a widely used industry benchmarking tool from CoStar Group.
Together, the three hotel groups operate more than 25,000 hotels worldwide, making the research significant in the international hospitality industry.
Hotel chains routinely use analytics platforms like STR to track industry metrics like occupancy rates, average daily room rates, and revenue per available room (RevPAR). Such tools can help operators adjust prices in response to demand and competition.
However, the CMA warned that the sharing of competitively sensitive information by rival companies, even indirectly through a third party, could reduce uncertainty between competitors and risk weakening competition.
“When competing companies share competitively relevant information, including through a third-party data analytics provider, this reduces the uncertainty that competing companies typically have about how they will behave towards each other,” the regulator said.
“This can affect how competitive companies are, as it makes it easier for them to predict what others will do and better coordinate their behavior.”
The regulator will now spend up to six months gathering evidence before deciding whether to issue a formal statement of objection.
At this stage, the CMA stressed that no conclusion had been reached and no assumptions should be made as to whether competition law had been breached.
Shares in London-listed IHG fell as much as 5 percent in early trading on Monday, although the wider travel sector was also under pressure due to geopolitical tensions in the Middle East.
In the U.S., shares of Hilton and Marriott each fell about 3 percent, while CoStar, which has a market value of more than $18 billion, fell about 2 percent.
IHG and Hilton both confirmed they were cooperating fully with the CMA’s investigation. CoStar said it was surprised by the regulator’s interest in a “long-established hotel data analytics and benchmarking platform” that has been used by companies and government agencies for decades.
Marriott did not immediately respond to requests for comment.
If the CMA concludes that there has been a breach of competition rules, it has the power to impose fines of up to 10 percent of a company’s annual global turnover.
The regulator can also grant immunity or reduced penalties to companies that report cartel activity early and cooperate with investigations.
The investigation is part of the CMA’s wider investigation into how digital tools and algorithms are used in pricing decisions across different sectors.
The regulator has increasingly focused on the intersection of competition law and technology, warning that algorithmic pricing systems, while potentially increasing efficiency, must not facilitate anti-competitive coordination.
The hospitality investigation comes amid a number of high-profile competition cases in recent years.
In November, the CMA opened investigations into eight companies over online pricing practices. Last year, seven major British housebuilders agreed to allocate £100 million to affordable housing initiatives after the regulator found evidence of information sharing that may have harmed competition.
The latest case highlights regulators’ growing concern that data-sharing arrangements, even when brokered through analytics providers, could blur the line between legitimate benchmarking and unlawful coordination.
For the hotel industry, the outcome of the investigation could have significant implications for how pricing data is shared, analyzed and used across the industry.
