European hoteliers are increasingly dependent on large online travel agencies to cover rooms at the expense of direct distribution, but half of them complain of unfair treatment and price undercutting by OTAs.
This follows a report by the European Hotels, Restaurants and Cafés Association (HOTREC), which accuses OTAs of “unfair business practices”.
HOTREC welcomed the recent designation of Booking.com as a “gatekeeper” by the European Commission under the Digital Marketplaces Act (DMA) and called for the correct application of the law last week.
Marie Audren, director general of HOTREC, accused Booking.com of “withholding guest data from hotel partners and preventing hotels from offering better rates on their own sites”.
“Hotels face unfair business practices from Booking.com every day – financial losses, operational pressure and a blow to their reputation. This must stop,” Ms Audren added.
The Association’s Hotel Distribution Study 2024, which was carried out on a sample of more than 3,000 hotels between February and April this year – including France, Germany, Italy, Spain, Greece, Italy, Greece and Turkey, but not the UK.
It found that 51% of bookings came from direct bookings in 2023, the same as in 2019, but down from 58% in 2013. Almost a third (30%) came through OTAs, up from 20% in 2013, and around 15% through trade, with the remainder through other channels.
Booking.com accounted for 71% of OTA bookings and Expedia Group accounted for 14%.
The survey concluded that “Booking .com and Expedia dominate the market and control prices.”
Meanwhile, the investigation found “widespread complaints about OTAs’ high commission rates and frequent allegations of monopolistic practices,” with OTAs “undercutting hotel rates, using marketing budgets and offering unauthorized discounts and promotions without hotelier consent.”
More than two in five hotels (43%) reported that OTAs undercut their rates, 16% “frequently”.
HOTREC also recorded “concerns about [the] fair and transparent treatment of OTA practices, including resale from other platforms”.
Hotels reported “problems communicating with OTAs to provide support”, “poor communication with guests booking through OTAs” and “problems tracking bookings from multiple OTA sources”.
The survey also reported that multiple OTA supply led to “inconsistencies in pricing, errors in bookings, lack of direct contact with guests, poor service, financial losses, operational burden and reputational damage”.
However, almost half of hotels (48%) relied on OTAs to sell a third or more of their nights and 20% more than half, with smaller hotels being the most reliant.
The European Commission on Booking
The European Commission confirmed in May that Booking.com is a “gatekeeper” under the Digital Marketplaces Act (DMA).
Parent Booking has six months to comply with the DMA and report on its compliance.
The Commission can impose fines of up to 10% of global turnover in the case of non-compliance and up to 20% in the case of repeated breaches, as well as additional remedies such as requiring a gatekeeper to sell a business or parts of it.
Margrethe Vestager, the EU’s executive vice-president in charge of competition policy, said: “Holidaymakers will start to benefit from more choice and hotels will have more business opportunities after our decision.”
Internal Market Commissioner Thierry Breton added: “Booking is an important player in the European tourism ecosystem. We will work to ensure that it fully complies with the DMA.”
The DMA came into force on 7 March and the European Commission launched major investigations the same month against Google’s parent company Alphabet and other “gatekeeper” platforms Apple and Meta for non-compliance.
Google is the subject of two investigations, one into whether its search results – including Google Flights and Google Hotels – promote its own services over those of its competitors.