Britain's competition watchdog has launched an investigation into three of the world's largest hotel chains over suspected sharing of competitively sensitive information through a third-party data analytics tool.
The Competition and Markets Authority (CMA) said it is examining whether Hilton, Intercontinental Hotels Group PLC (LSE:IHG) and Marriott used STR, a hotel data analytics platform owned by property data company CoStar, to share information in ways that may have weakened competition between them. All four businesses are under investigation.
The CMA said that when rival companies share competitively sensitive information, even through a third-party provider, it can reduce the uncertainty that competing businesses normally have about each other's behaviour, making it easier for them to predict and coordinate their actions rather than compete independently.
The investigation centres on whether the hotel groups exchanged information that goes beyond what is permissible under competition law. Information is considered competitively sensitive when it reduces uncertainty in the market and is capable of influencing the commercial strategy of other businesses.
Hilton, the American hospitality company, operates more than 8,000 properties worldwide.
IHG Hotels and Resorts, the FTSE 100 group behind brands including Holiday Inn and Crowne Plaza, is headquartered in Windsor.
Marriott International, also American, is one of the world's largest hotel operators with a portfolio spanning around 9,000 properties across more than 140 countries. CoStar Group, the Washington-based real estate data and analytics company, acquired STR in 2019.
The CMA was careful to note that no conclusions should be drawn at this stage about whether competition law has been broken.
Following its information-gathering phase, the regulator may issue a statement of objections if it reaches the provisional view that the Competition Act 1998 has been infringed.
Data analytics tools are widely used across the hospitality industry to support commercial decisions, including pricing, and the CMA acknowledged that such tools can bring legitimate benefits, including more intense competition, lower costs and faster price adjustments to reflect changes in supply and demand.
However, the watchdog has been increasingly attentive to the potential for algorithms and shared data services to facilitate coordination between competitors, and has published guidance setting out how businesses can use such tools without falling foul of the law.
The investigation forms part of the CMA's broader effort to ensure that new technologies support rather than undermine fair competition.
The CMA's inquiry follows similar scrutiny in other sectors. The watchdog has previously examined the use of pricing algorithms in markets including rental housing, where concerns have been raised that shared data services may enable rival operators to align their commercial behaviour without direct contact.
Updates to the investigation will be published on the CMA's case page.