Excerpt from Business Travel News
After Accor, Hilton, InterContinental Hotels Group and Marriott International pooled together $50 million to invest in meetings technology platform Groups360, some in the managed travel industry voiced concerns about the potential for an antitrust situation, including collusion and exclusivity concerns.
"It will be interesting to observe how Groups360 will manage its board, since each of the major investing hotels have a seat on the board, and [how it will manage] the information regarding group business to avoid antitrust issues," said one industry technology owner. "The hotels' Groups360 transaction is the resurrection of StarCite in terms of structure," the person said, referring to the meetings management technology. Many of the major hotels were on the board of StarCite, and surprise, surprise, they discussed rates."
The owner of another industry technology product was told by a group sales rep from a hotel that if the technology company wanted inventory from that hotel company, it soon will have to go through Groups360. "By its essence, it's an anticompetitive stance," the technology owner said. "If five different suppliers say, 'You now have to go through this other place that we own and we'll control the terms and distribution and fees and prices there,' then that's just antitrust. I'm surprised their lawyers didn't catch that before they got into the deal."
That tech company owner also ventured that the hotel companies aim to move all meeting sourcing for their spaces to the Groups360 platform and then rip off the Band-Aid to eliminate commissions paid by the hotels to group intermediaries. Most major hotel companies reduced such commissions from 10 percent to 7 percent over the course of 2018, causing consternation among meeting planners and corporations' strategic meetings management programs.
Groups360 executive chairman David Kloeppel said the company had been advised by antitrust lawyers "throughout the creation of the investment process" and that it is sensitive to antitrust matters. "The objective of the platform is to make it simpler and easier for planners to book meetings," Kloeppel said. "We understand that anybody who wants to list product on our platform will be sensitive to who has access to their own pricing information. We have internal protections to make sure pricing doesn't get into the wrong hands."
The platform, which allows meeting planners to search for hotels and future rates, is closed, and planners have to get login credentials and be vetted to use it. Plus, Kloeppel said, its rate projections are determined by an internal algorithm that is "not anything an external party gave us. It's our own secret sauce, so there's not much concern over antitrust matters because it's not anyone's specific information."
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