Controversy over France's ban on hotel rate parity clauses

The French National Assembly has approved the so-called Macron Law, which abolishes any parity clause in contracts between hoteliers and online travel agencies (OTAs). The measure, which follows legal precedents along the same lines that were ruled in Germany at the end of last year, has caused great controversy among hoteliers and agencies.

 

This is the first legislative decision in Europe that explicitly prohibits price parity clauses in such contracts. With this decision, hoteliers in France will be able to offer their customers any offer or discount they deem appropriate. France becomes the second European country, after Germany, where public authorities decide to ban price parity clauses in contracts with OTAs.

The French law will allow French hoteliers to set lower prices in their direct online and offline distribution channels than the rates available through intermediaries, thus putting an end to the mandatory price parity clauses.

For Juan Molas, president of Confederación Española de Hoteles y Apartamentos Turísticos (CEHAT) the law passed in France "is a real revolution that is underway for the French and European hotel industry, but above all for our customers. Following the decision of the French competition authority, this law will contribute to the creation of a renewed contractual framework to re-establish the conditions for a commercial relationship based on trust between hotels and booking sites in the interest of the consumer.

Susanne Kraus-Winkler, president of HOTREC, the European hospitality employers' association, also welcomes the new French law:

The European hotel industry regards this decision as a key milestone in restoring full entrepreneurial freedom for hoteliers across Europe. After Germany, which banned parity clauses in a competition case, followed by a court ruling, France opens with the legislative process, a new way forward.

In the complete opposite direction, online agencies have spoken out. “If hotels determine prices, there will be no rate competition. Hotels will unfairly favor their own channels with better rates and availability, which will reduce competition and consumer choice, says Christoph Klenner, secretary general of the European Travel Technology and Services Association (ETTSA).