Hotels had been meeting for decades to exchange insider information regarding occupancy rates and future pricing projections.

If you were putting together a who’s who of famous fancy hotels in Tokyo, you’d have to start with the Imperial Hotel. The Hotel New Otani, Okura Tokyo, and Hyatt Regency Tokyo would also make the list, as they’re all long-established hotels providers of accommodation for travelers craving class and comfort while staying in the city center.

But it turs out there’s something less appealing that those hotels have in common too, which is that they’ve been warned by Japan’s Fair Trade Commission that something they’d been doing for a very long time could be considered a price-fixing antitrust violation.

The Fair Trade Commission has discovered that representatives from 15 Tokyo hotels with different ownerships had been regularly meeting on a monthly basis to exchange information including their respective hotel occupancy rates, average room fees charged, and projections regarding future pricing changes. Referred to by the hotels as “FR (front reservation) meetings,” the practice had been going on for decades, the Fair Trade Commission discovered.

The Fair Trade Commission’s investigation has not found any concrete evidence of outright collusion, such as the hotels collectively agreeing to raise prices simultaneously to orchestrate a shortage of lower-priced alternatives. However, the investigators believe it is possible that the insider information provided at the meetings regarding competitors’ current and projected business conditions could have influenced pricing decisions at other hotels, and that the meetings could possibly be construed as the members forming a price-fixing cartel. The hotels have been warned to cease the practice, and have done so.

The complete list of hotels to receive the warning consists of the Imperial Hotel, Hotel New Otani, Okura Tokyo, Hyatt Regency Tokyo, Hotel Metropolitan, Keio Plaza Hotel, Cerulean Tower Tokyu Hotel, Hotel Chinzanzo Tokyo, Asakusa View Hotel, Palace Hotel Tokyo, Royal Park Hotel, Dai Ichi Hotel Tokyo, Prince Park Tower Tokyo, Grand Nikko Hotel Daiba, and Sheraton Miyako Hotel Tokyo.

For their part, the hotels claim that there was no collusive intent behind the meetings. “Although the actions pointed out [by the Fair Trade Commission] were not done with the intent of unfairly restricting [competition], we will continue to fully cooperate with the investigation,” said a spokesperson for the Imperial Hotel, which says it voluntarily withdrew from the monthly meetings last August after it was determined that they could constitute a violation of antitrust laws. A representative for the Hyatt, which stopped attending the meetings last September, said “Our purpose in attending the meetings was not to obtain information to be used in setting our prices, but to learn about the overall state of operations at other companies’ hotels, such as the ratio of smoking and non-smoking rooms or the introduction of cleaning robots.”

Considering, though, that the meetings were called “forward reservation meetings,” not “smoking meetings” or “robot meetings,” it seems obvious that data about reservations, such as the number and prices of room bookings, was seen by members as the key information that was to be exchanged. With the negative effects the pandemic had on travel now completely over and Japan in the middle of its largest travel boom ever (there were 650 million nights of hotel stays in Japan last year, the largest number in the country’s history), and hotel prices continuing to rise higher and higher, price-fixing isn’t going to be viewed with much sympathy, and hopefully ending the meetings will help keep competition honest and prices for travelers fair.

Source: NHK News Web, Yomiuri Shimbun via Livedoor News
Top image: Pakutaso
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