Are the distribution giants losing ground? - Part 1

The tide is turning for OTAs

According to the latest rankings by Médiametrie/NetRatings and Fevad, Booking.com is the leading e-commerce site specialising in travel, with over 17 million unique visitors per month. Taking all sectors together, the OTA is in 3rd place, up 2 places on the last ranking.

Booking is also particularly popular in Spain. In fact, 73% of Spaniards book their accommodation on the platform, while Airbnb is in second place with "only" 30% of the vote. Tripadvisor and Expedia are a long way behind, with 13% and 7% of respondents using these sites respectively.

While OTAs continue to be powerful players in hotel distribution, all does not seem so rosy of late. The headlines about them show that their virtual monopoly is being shaken. This is particularly true of Booking, despite the fact that it is the leading OTA.

After months of waiting and suspense, the decision has finally been made. eTraveli will not be joining Booking's portfolio following the European Commission's deliberation. As a reminder, the Commission was strongly opposed to this acquisition, which would only have strengthened the platform's virtual monopoly and increased commissions for hoteliers and consumers alike.

David Goulden, CFO of Booking Holdings, stated as recently as last September that the company would "profoundly disagree" with a veto by the Commission and did "appeal this decision before the European courts".

Furthermore, Booking Holdings had to pay $90 million in compensation last month to eTraveli, representing 5% of the total purchase price. While break-up fees are generally between 1 and 5% of the total value of the agreement and are paid by the seller to the buyer, it seems that a reverse break-up clause was included in this agreement.

The bad news doesn't stop there for the platform. Booking has been forced to pay...