Although the Digital Markets Act (DMA) has not yet come into force, it is already causing quite a stir. Intended to regulate the preponderance of the major online platforms in Europe's digital markets, this law could actually have the opposite effect, according to Sébastien Bazin, CEO of Accor. The last straw for a regulation that was supposed to help hoteliers in the face of the virtual monopoly of the OTAs. While the end of the omnipotence of the OTAs still seems a long way off, what is the current state of the hotel distribution market? Is the balance of power changing, or is the distribution landscape staying the same?
Still heavily dependent on OTAs
It's no secret that OTAs play a dominant role in the modern hotel distribution landscape. According to a study conducted by Hotrec and the Tourism Institute of the HES-SO Valais-Wallis, the market share of OTAs has risen from 19.7% in 2013 to 29.2% in 2019, while the share of direct bookings has fallen from 57.6% in 2013 to 47% in 2019. Year after year, these online agencies are gaining market share at the expense of both franchised and independent hoteliers.
The media outlet Skift also claims that European hoteliers are far more dependent on OTAs than their American counterparts. In fact, almost 4 out of 10 bookings are made via an online travel agency in Europe, representing 39% of all bookings, compared with 'only' 29% on the other side of the Atlantic. The American media explains this discrepancy by the greater number of independent hoteliers in Europe, who find it more difficult to compete with the behemoths such as Booking, Expedia and TripAdvisor.
But it also points the finger at the limited use made by European hoteliers of the "privileges" granted by the laws banning price parity. According to figures shared by Skift, 86% of European hoteliers offer similar prices on their sites and on OTAs, whereas more American hoteliers make use of this practice.
Furthermore, prices are often 31% lower on an American hotel website than on an OTA, whereas the difference is only 27% on average on the Old Continent. This finding is shared by the European Commission, which stated in 2020 that "laws prohibiting OTA parity clauses have no significant effect on hotel price differentiation strategies".
Another reason for this difference is that European hoteliers are less familiar with and use Google than their American counterparts. In fact, "a hotel's direct site...
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