the mutual recognition of their interdependencies will reduce the intensity of competition, leading to mutual forbearance. This article argues that differentiation moderates negatively the effect of multimarket contact on price because differentiation decreases the recognition of interdependence and thus, it makes difficult mutual forbearance. Using data from 1147 Spanish hotels that belong to a chain, this study shows that chain hotels with higher multimarket contact and higher differentiation (i.e. more stars, the Q certificate, common umbrella brand and a unique combination of services) charge higher prices. The evidence confirms the negative interaction but only for horizontal differentiation (i.e. different services and common brand).