UK Competition Watchdog Investigates Hotel Giants Over Data Sharing Practices
The UK's Competition and Markets Authority (CMA) has initiated a formal investigation into several leading hotel chains, including Hilton, Marriott, and FTSE 100 constituent Intercontinental Hotels Group (IHG), over concerns regarding their use of a shared data analytics tool. The probe, announced on Monday morning, focuses on the potential sharing of competitively sensitive information through the STR analytics platform.
Details of the Investigation
The CMA's investigation centers on whether these hotel chains utilized the STR data analytics tool to exchange information that could reduce uncertainty about each other's actions, potentially enabling coordinated behavior in the market. Analytics tools like STR are commonly employed by hotel operators to inform pricing decisions and assess market dynamics.
The watchdog emphasized that while such tools can promote competition and efficiency, sharing sensitive data among rivals may undermine competitive forces. The CMA stated: "When rival businesses share competitively sensitive information – including through a third-party data analytics provider – this reduces the uncertainty competing businesses normally have about how each other will act. This can affect how strongly companies compete because it makes it easier for them to predict what each other will do and coordinate their behaviour."
Companies Under Scrutiny
The investigation encompasses multiple industry giants:
- Intercontinental Hotels Group (IHG): Owner of Holiday Inn and numerous luxury brands, IHG saw its shares decline by five percent to 132 cents following the announcement.
- Marriott International: Operating approximately 9,000 locations with over 1.5 million rooms across 37 brands including Marriott Bonvoy.
- Hilton Hotels: Founded in 1919, Hilton manages more than 7,500 properties globally as of 2024.
Costar, the real estate information company that developed the STR tool, is also included in the investigation. A Costar spokesperson expressed surprise at the probe, stating: "We are surprised at the CMA's interest in a long-standing hotel data analytics and benchmarking platform, that for decades has been used by companies and government entities alike to better assess market dynamics."
Market Context and Responses
The investigation comes amid significant investment activity in London's hotel sector. Just last week, former Conservative chancellor Nadhim Zahawi participated in an equity group investing over £1 billion into the London Marriott Hotel in Grosvenor Square and another Mayfair property.
IHG confirmed awareness of the investigation and pledged full cooperation with the CMA. The watchdog clarified that no assumptions should be made about potential breaches of competition law at this preliminary stage. Hilton and Marriott were contacted for comment regarding the investigation.
The CMA maintains that its investigation aims to ensure fair competition in the hospitality sector, protecting consumer interests and market integrity.
