Broad and narrow price parity agreements: Evidence from European hotels
Year: 2026
Type: article
Abstract: This paper investigates the effect of "price parity" clauses in contracts between hotels and online travel agencies (OTAs). These restrictions require a hotel to set its lowest prices for a given room on a travel agency's website and have come under recent scrutiny by antitrust regulators. We use a difference-in-differences strategy based on a series of policy changes in Europe. Our analysis finds that (i) restricting the broadest form of parity clauses, but leaving in place a more limited version, reduced prices by 3.2%; (ii) a complete ban on parity clauses reduces prices by 6.9%. We then investigate the mechanisms behind these findings; we provide suggestive evidence that both increased inter-OTA competition, as well competition between OTAs and hotels' direct channels, played a role in reducing prices.
Authors: Ben Klopack, Nicola Pierri
Institutions: Texas A&M University, International Monetary Fund
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $3,290
OpenAlex ID: W7127350642