The Price Effects of Prohibiting Price Parity Clauses: Evidence from Global Hotel Chains

Abstract Dominant platforms like Booking.com have often imposed Price Parity Clauses to prevent lower prices on alternative sales channels. We provide quasi-experimental evidence on the removal of these price restrictions in France in 2015 for three major global hotel groups. Our analysis reveals limited and non-significant price effects for rooms sold through consumer-visible channels, such as hotels’ websites or online travel agencies. However, we document a significant price reduction on sales channels not visible to consumers, such as direct offline bookings. Additionally, we identify a significant shift in the share of bookings from online travel agencies to the hotels’ direct offline channels.