Booking.com chickened out after the furore caused by the issue of the virtual card commission rate, which it informed Greek hoteliers at the beginning of last month that it will be added to the existing taxes they pay on the online platform.
With the issue creating a backlash, Booking is now changing its view in a new letter, dated June 7, which it sent to hoteliers, informing them that the adverse changes against hoteliers are postponed to a later date, so as not to create disruption during this year’s high tourist season.
The text of the letter is as follows:
“…Please know that we have taken your comments very seriously. We have listened to the feedback from you and our colleagues and understand that this change can be inconvenient during the busy summer period. To minimize disruption, we have decided to delay the implementation of this policy change until later in the year. We will announce this development to our partners on 10 June.
This postponement means that there will be no changes on 10 June. Our partners will continue to accept bookings as usual, avoiding disruption during the peak period. They can also continue to offer prepayment to their guests without changing their current policies. In addition, partners can sign up for payments through Booking.com if they choose to do so.
While our decision to postpone this policy change is intended to give our partners more time to prepare and to ensure it does not affect the busiest months, our commitment to promoting a safe and reliable experience for both partners and travellers remains steadfast. A primary objective of this change is to minimise payment security risks, which remains a top priority for us. In the section below, we will discuss why we believe this change in payment policy is a critical element of our mission to ensure our platform offers a secure environment.
Changes to prepayment policy in the context of security
From the beginning of 2023, the hospitality industry has seen a significant increase in financial fraud attacks targeting travellers. One method that has significantly impacted Booking.com and its partners is the use of phishing links on online travel agency platforms. These attacks are aimed at taking over partners’ accounts and deceiving travellers with fraudulent payment links to steal their financial information.
While Booking.com has significantly increased its investment in ensuring secure and trustworthy communications across our platform, including numerous initiatives aimed at educating our partners on secure practices and the use of improved security settings, it is not possible to completely eliminate the possibility of these attacks. Partner accounts will always be susceptible to breaches despite the numerous controls in place.
A primary risk arises when visitors make reservations based on prepaid policies offered by partners using the “agency model” (i.e., partners who prefer to accept payment directly and send payment links to visitors through our platform). Attackers have taken advantage of this need by creating seemingly legitimate requests that easily deceive travelers. These attacks have resulted not only in financial loss to our shared travelers, but also in damage to the reputation of Booking.com and our partners.
While we understand that partners using the ‘agency model’ prefer the option of pre-arrival payment to optimise the check-in process, we also recognise the potential negative impact on travellers’ experiences if they fall victim to cybercriminals. Ensuring a seamless and secure payment process is paramount to maintaining trust between travellers, partners and Booking.com. To address this, we aim to pilot a process that improves the traveller experience and enhances the credibility of our platform.
Our approach to addressing this issue
Our strategy to mitigate this risk includes two options currently available to our partners:
- Partners who prefer to charge guests directly can continue to do so, with non-prepaid policies.
- Partners who prefer to receive payments in advance can use Payments by Booking (PbB) to collect prepayments, cancellations and no-show collections.
By implementing this change, we are reducing the need for partners to send payment links to our platform, promoting a more secure and reliable experience for travellers. Enhancing traveler trust and security ultimately protects our partners’ businesses and strengthens our partnership with them.
While we are implementing these changes from a security perspective, we are also committed to providing partners with as much early notice, transparency and support as possible to successfully navigate these changes. It is important to note that this will not affect the ability of partners to send links to visitors. The use of URLs will not be directly affected.
Closure
We hope that this letter provides clarity on the rationale behind our upcoming changes. We believe that by working together, we can significantly enhance the security of our platform and the trust of our valued travellers. Your support and understanding is vital as we navigate these changes and we are confident that this partnership will lead to a stronger, more secure partnership.
Tasos Efthymiou, our Area Manager, is available to answer any questions you may have and ensure a smooth transition. We look forward to continuing our successful partnership and collectively promoting a safe and reliable environment for all.
Thank you for your continued support.”
The background
It is recalled that Booking obliged Greek hoteliers to pay for non refundable reservations only through its Virtual Card, paying an exorbitant commission and unilaterally abolishing the alternative options that existed until today, while at the same time increasing the commission excessively.
At that time, the president of the Panhellenic Federation of Hoteliers (POX), Mr. Giannis Hatzis by letter to Booking’s Greece and Cyprus Manager, which he communicated to the Minister of Tourism Mrs. Olga Kefalogianni complained about this unilateral move by the company, which “unjustifiably burdens hoteliers, since they require the acceptance of the increased commission rates of these virtual cards in order to limit the risk of non-show customers”.
According to information, until now, payment could be made in many alternative ways (credit card, bank transfer, cash, etc.), while until a few months ago the commission of the Booking virtual card transaction was 1.1% and recently it became 3%. In addition, while the hotelier could collect the money as soon as the booking was made, now it is paid on the day of arrival.
At the same time, this new tactic of Boooking was added to the complaint that the Hellenic Chamber of Hotels had made to the Competition Commission, which is proceeding slowly.
The issue had become known following a complaint by the President of the Santorini Hoteliers Association, Mr. Antonis Pagoni, who had stated to MONEY & TOURISM: “This is yet another episode in the Boooking series, which is constantly burdening the Greek hotelier with tactics that go against the principles of healthy competition. We are not going to let it pass.”
Complaint of the HCHG to the Competition Commission
It is recalled that the Hellenic Chamber of Hotels (HCHG) had filed a complaint with the Competition Commission regarding unfair practices of digital platforms that abuse their dominant position in the online booking market.
The complaint had placed special emphasis on the non-compliance of Online Travel Agencies (OTAs) with previous decisions of the Competition Commission regarding the arbitrary rate clauses that continue to be imposed by Online Travel Agencies, as well as on their misleading advertising methods, which were developed and continue through the online searches of users, as certified by the relevant research of the Misleading Advertising Observatory that monitors and records these practices on behalf of HCHG.
It should be noted that the complaint of HCHG came after many contacts with national associations representing the hospitality industry in countries such as Germany and France, which have resolutely confronted these practices, but also in the light of the new facts created by the new Digital Markets Act (DMA) adopted and now in force in the European Union, justifying HOTREC’s decade-long effort to bring digital platforms into compliance with a defined framework of obligations and prohibitions.
The president of the Greek Chamber of Tourism, Mr. Alexandros Vassilikos, in a statement had pointed out: “Our only weapon against inflation and accuracy is growth. But the prerequisite for growth is healthy competition, especially when we refer to the hospitality sector, on which the country puts its hopes every year. However, if hospitality is to be able to give what it can to the economy and society, it must at least not be undermined in unfair ways. When we are planning the long-term sustainable tourism future of Greece, we cannot at the same time be blind to abusive and misleading practices and that is why we have proceeded with the complaint to the Competition Commission, asking for the obvious”.
