Singapore competition authorities allege possible infringement by some hotels

Singapore two-dollar bills

The Competition & Consumer Commission of Singapore (CCCS) on Thursday issued a proposed infringement decision (PID) against several Singapore hotels for allegedly entering into agreements or practices to discuss and exchange confidential, sensitive and specific information on hotel accommodation for 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,” the CCCS statement 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.”

CCCS alleged that sales representatives of Capri by Fraser Changi City Singapore and Village Hotel Changi and Village Hotel Katong discussed and exchanged information on hotel accommodation in Singapore for corporate customers from at least 3 July 2014 through 30 June 2015.

In response, Frasers Hospitality said in an SGX filing after the market close on Thursday, “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.”

CCCS also alleged that sales representatives for the Capri and Crowne Plaza hotels shared information on corporate customers from at least 14 January 2014 to 30 June 2015.

The Capri by Fraser Changi City Singapore was owned by Ascendas Frasers Pte. through 30 March 2015 and by Frasers Hospitality Trustee from 31 March 2015, while Frasers Hospitality was the appointed agent for the management and operation of the hotel, the CCCS statement said.

Far East Organization Centre owns the Village Hotel Changi and Orchard Mall Pte. owns the Village Hotel Katong, and Far East Hospitality Management (S) is the appointed agent for the management and operation of the two hotels, CCCS noted.

In a filing to SGX after the market close on Thursday, Far East Orchard Ltd. said it would cooperate fully with CCCS in the investigation.

“The group takes legal compliance very seriously and is committed to compliance with all applicable laws. It has and continues to take various steps to review and implement rigorous compliance and training programmes to ensure that its business practices are and continue to be fully compliant with all applicable laws,” Far East Orchard said in the statement. “The group is unable to make any further comment on matters which are part of the ongoing investigations.”

The Crowne Plaza Changi Airport Hotel has OUE Airport Hotel Pte. as the owner and master lessee, while Inter-Continental Hotels (Singapore) is the appointed agent for the management and operation of the hotel, CCCS said.

Inter-Continental Hotels (Singapore) didn’t immediately return Shenton Wire’s emailed requests for comment, which were sent outside of office hours.

OUE Ltd. clarified in an SGX filing on Friday after the market close that the hotel is managed by Inter-Continental Hotels (Singapore), under a contract with OUE Airport Hotel, a wholly owned subsidiary of OUE Ltd.; it noted it had six weeks to respond to the CCCS.

OUE Hospitality REIT’s manager also clarified in a separate filing on Friday that OUE Airport Hotel is the master lessee of Crowne Plaza Changi Airport hotel under an agreement between OUE Hospitality REIT Management, RBC Investor Services Trust Singapore, which is the OUE Hospitality REIT trustee, and OUE Airport Hotel.

This article was originally published on Friday, 3 August 2018 at 6:09 A.M. SGT; it has since been updated to include the comment from OUE Ltd. and OUE Hospitality REIT’s manager.

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