Hoteliers claim Booking.com parity agreement still wrong and anti-competitive
Booking.com‘s move to appease regulators over rate parity agreements with hotels has not been met with universal applause. Far from it, in fact. The Priceline Group-owned accommodation giant claimed earlier this week that it will follow guidance from authorities in Sweden, France and Italy and “abandon its price, availability and booking parity provisions with respect to other online travel agencies”.
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The agreement means that Booking.com will not require the rates that hotels offer on the agency website are the same or lower than those featured on other OTAs. On the one hand this development should have brought some degree of joy to rival agencies, many of which have complained for years that they are unable to compete when previous clauses in hotel contracts restricted them from being able to offer their discounts on hotel stock. But it is now the caveat that Booking.com secured as part of this week’s agreement which has ignited another round of complaints. Booking.com said its “narrow Most Favoured Nation” agreements would continue, allowing it to offer the same rates and conditions as those on a property’s own website. It is now hotels themselves which have come out in force to criticise the latest developments in the ongoing rate parity saga. In the UK, where the original complaint against Booking.com and Expedia first started five years ago, both the British Hospitality Association and the Bed and Breakfast Association have come out angrily against the new set-up agreed to by Booking.com. Jackie Grech, legal and policy director at the BHA, says the industry benefits from an “open market, especially customers who will see lower prices and greater innovation if fairness is restored to the online hotel booking market”. “While we acknowledge the effort of the competition agencies to consider this area, these commitments fall short of progress and will not benefit customers or hospitality businesses in a meaningful way. “We all want the same thing: a competitive and innovative market for hospitality and tourism, these commitments missed the mark in aiding that goal.” The BHA claims online travel agencies have the ability to “impose high commissions, often in the 35% range”, meaning properties have an increase on the “real cost” of a room, “just for using their services.” Grech continues: “As a result, the hotel has little ability to attract customers to book directly which would save that 35% commission and lower room prices for all. “The result is higher prices and less option to negotiate better deals with customers.” The Bed and Breakfast Association did not mince its words, arguing the settlement will allow Booking.com to “bully” independent hotels. The group’s chairman, David Weston, says the agreement is “wrong and anti-competitive” and not in the interests of consumers. He says: “The association believes that Booking.com should not be allowed to prevent B&Bs and hotels from offering their lowest prices on their own websites, and also believes that Booking.com, Expedia and other OTAs should not be allowed to buy top places on web searches by bidding on the names of individual hotels and B&Bs, without their explicit permission, for pay-per-click search advertising on Google.” - See more at: http://www.tnooz.com/article/hoteliers-claim-booking-com-parity-agreement-still-wrong-and-anti-competitive/#sthash.vBo1ZEB8.dpuf