Competition watchdog probes trade data exchange between hotel operators

Far East Hospitality Trust and OUE Hospitality Trust are some of the firms involved.

The Competition and Consumer Commission of Singapore (CCCS) issued a Proposed Infringement Decision (PID) against the owners and operators of three hotels: Capri, Village Hotels, and Crowne Plaza.

CCCS issued a proposed PID against the new and old owners and operators of Capri (Ascendas Frasers, Frasers Hospitality Trustee, and Frasers Hospitality); Village Hotel Changi and Village Hotel Katong (Far East Organization Centre, Orchard Mall, and Far East Hospitality Management); and Crowne Plaza (OUE Airport Hotel and Inter-Continental Hotels Singapore).

The owners and operators of the hotels violated the section 34 of the Competition Act (Cap. 50B) by entering into agreements or practices to discuss and exchange confidential, customer-specific, and sensitive information on the provision of hotel room accommodation in Singapore to corporate customers.

“The information shared between the sales representatives of competing hotels included non-public bid prices in response to corporate customer requests, as well as percentages of price reduction which customers asked for and the corresponding responses by each hotel sales representative during confidential price negotiations,” CCCS said.

“The exchange of such commercially sensitive information would reduce the competitive pressure on prices/contract terms offered by competing hotels to their corporate customers,” it added,

CCCS’ own probes also revealed that sales representatives of Capri and Village Hotels have exchanged sensitive information from at least 3 July 2014 to 30 June 2015. The sales representatives of Capri and Crowne Plaza Hotels also exchanged sensitive information from at least 14 January 2014 to 30 June 2015.

The competition watchdog gave the owners six weeks to make representations. “CCCS will then make its decision, after careful consideration of the representations, as well as all available information and evidence,” it added.

In a response to the announcement, Frasers Hospitality said, “ We do not condone any of our employees engaging in such conduct and we take such matters seriously. We are studying the PID and will respond to the CCCS in due course.”

Far East Orchard (FEOrchard) also said it will study the PID and consider the appropriate action. “The Group has extended and will continue to extend its fullest cooperation to CCCS in the investigations. The Group takes legal compliance very seriously and is committed to compliance with all applicable laws,” it said.

FEOrchard added that it is unable to make any further comment on matters which are part of the ongoing investigations.

“The remedies, directions and financial penalties imposed by CCCS is unclear at the moment, thus the financial impact on Far East Hospitality Trust and OUE Hospitality Trust is difficult to judge,” said DBS Equity Research analyst Mervin Song.