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Booking.com's promises have not won unanimity

While they may be considered a step forward in hotelier-OTA relations, promises made by Booking.com to the Competition Authority are considered insufficient by professionals. While they consider the online booking site to be a partner of choice, hoteliers have expressed their wishes in a survey and in statements gathered by Hospitality ON, with Olakala.

The Competition Authority made its verdict last week regarding the conflict that opposes hoteliers and OTAs, and Booking.com in particular. The latter has committed to renouncing certain advantages it had thanks to its commercial practices, such as the modification of the price parity clause through which the reservation platform obliged hoteliers to give it pricing conditions that were at least as advantageous as those practiced on the other distribution channels. Hotels are thus able to adopt a lower price policy on websites of other OTAs, through their own traditional sales channels (telephone, fax, on-site), and through their on-line channels that are not open to the general public (such as sites of loyalty programs, e-mails and other direct sales tools). On the other hand the web site and other on-line channels addressing the hotelier's "general public" remain subject to price parity, even if the end of the "availability parity" will allow hoteliers to play freely with the allotments: while they may be unable to offer a lower price than Booking.com on their own website, they will be able to limit the number of nights sold by the famous OTA that is incontestably the leader in Europe.

And yet, the promises made by the on-line hotel reservation website have not won unanimous approval from the profession, as shown by results from a survey by Hospitality ON, with Olakala. 62% of hoteliers interviewed say they are dissatisfied, of which 27% are quite clear about their dissatisfaction. Moreover, of the 38% that are mostly satisfied by Booking.com's efforts, 32% estimate they are insufficient and that many axes remain to be worked upon, mostly as far as concerns price parity, the purchase of key words on Internet and the level of commissions.



Do you consider the promises made by Booking.com sufficient?





Towards total pricing parity



Demanding hoteliers surveyed would like to see total suppression of price parity in order to be able to elaborate their price policy and be able to offer rooms for less on their own website. With the new measures, "freedom of prices and competition is respected between OTAs but not for the primary player, the hotelier," reflects one hotelier participating in the survey. It is particularly the fact that this authorization limits their ability to practice the lowest rates only via off-line channels that upsets professionals, who outline the weakness of off-line sales in the actual reservation process: "Hoteliers gain no freedom in terms of rate differentiation from OTAs. In order to be stronger, they would need to be freed from the on-line parity clause, because off-line is quite insignificant today"; "Saying that the price may be lower by telephoning the hotel directly is catastrophic! Foreign clients do not telephone; the French will put pressure on the receptionist to have a better price, and that does not allow us full pricing freedom on our sites whereas it's direct sales," add fellow hoteliers.

Putting an end to brand jacking; more moderate



Many participants in the survey rehashed the problem of "brandjacking", meaning the re-appropriation of their brand on the Web through the purchase of keywords. Hoteliers wish to regain control over referencing and recuperate their visibility on Internet. They want to see "it forbidden to use our commercial name to buy Google ad-words and advertising in our name on Internet" and are "dreaming" of a solution "so that the site Booking.com appears second in the search results, right after the professional site."

Finally, one of hoteliers'  battle horses concerns applied commission rates, which they consider to be too high. Some would thus like to "limit the percentage of the commission to 12%", or even adapt it to the number of stars, because at the current level "it prevents reinvestment in the property for maintenance and standards due to commissions that are too high, around 15% minimum of the price, VAT incl.," explains one hotelier.

Booking.com, a partner nonetheless



And yet, despite the conflicts, hoteliers do not question their relationship with the on-line reservation agency. In fact, 42% consider the platform an "additional sales channel" while 27% see it as a "good means to capture new clientèle". Inversely, 25% view the Web giant as a major impediment to their distribution, while 6% affirm they have never worked with it.



How do you perceive your relations with OTAs?



The online booking website thus remains an important partner for the profession, which simply wishes to be a bit more important in the relationship. "Booking is a very important partner. No one questions that. We need to succeed in regulating our relations with all OTAs," concludes one hotelier.

Some members in the profession recognize their share of the responsibility in the problems they are currently facing. "Generally speaking, the 'monster' created is only the result of past laziness and the current laziness of many 'amateur' hoteliers, who preferred to rely on the facilitated situation rather than travel to go see clients, or to develop efficient and lasting direct routes, even online with a real website, a real booking engine and real communications. Suppressing total parity is already a first important step in the effort to escape this diktat," summarizes one hotelier, before concluding: "It is not up to the authorities but to the hoteliers themselves, individually and collectively, to replace these intermediaries in the ranks that are rightly theirs, as wholesalers, and thus allotments with well-defined limits (like at the beginning before lazy hoteliers allowed themselves to be nibbled away at)".

It must be remembered that if hoteliers' expectations were particularly high with respect to this decision, in reality it is a first step forward: booking.com as much as the plaintiffs will have to find their places within the framework of regular meetings held to evaluate the efficiency, or lack thereof, of the initial steps taken regarding the competitive market situation. The measures required of the different actors on the market will thus need to evolve if they prove to be insufficient.

But while this decision marks the entry of this theme in the official agenda of national and European competition authorities, hoteliers were clearly hoping to go a bit further, starting now...

Also read:



  • New commitments for Booking.com in Europe

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