Europe’s hoteliers are increasingly reliant on major online travel agencies to fill rooms at the expense of direct distribution yet half complain of unfair treatment and being undercut on price by the OTAs.
That is according to a report by European hospitality association Hotrec which accuses the OTAs of “unfair business practices”.
Hotrec welcomed the European Commission’s recent designation of Booking.com as a ‘gatekeeper’ under the Digital Markets Act (DMA) and called for the act’s “proper implementation” last week.
Marie Audren, Hotrec director general, accused Booking.com of “withholding guest data from hotel partners and preventing hotels from offering better prices on their own websites”.
She said: “Hotels face unfair business practices from Booking.com every day – financial loss, operational strain and reputation damage. This must end.”
The association’s Hotel Distribution Study 2024 reports a survey of more than 3,000 hotels between February and April this year – including in France, Germany, Italy, Spain, Greece and Turkey but not the UK.
It found 51% of bookings came direct in 2023, on a par with 2019 but down from 58% in 2013. Almost one third (30%) came via OTAs, up from 20% in 2013, and about 15% through the trade, with the remainder via other channels.
Booking.com accounted for 71% of OTA bookings and Expedia Group 14%. The report concluded: “Booking .com and Expedia dominate the market and control pricing.”
The survey found “widespread complaints” about OTAs’ “high commission rates” and “frequent” accusations of “monopolistic practices”, with the OTAs “undercutting hotel prices using marketing budgets” and offering “unauthorised discounts and promotions without hotelier consent”.
More than two out of five hotels (43%) reported being undercut on price by OTAs, 16% “frequently”.
Hotrec also recorded “concerns over [the] fairness and transparency of OTA practices, including reselling from other platforms.”
Hotels reported “problems contacting OTAs for support”, “poor communication with guests booked through OTAs” and “issues tracking bookings from multiple OTA sources”.
The report also found OTA multi-sourcing led to “pricing inconsistencies, booking errors, lack of direct guest contact, poor customer service, financial loss, operational strain and reputation damage”.
Yet almost half the hotels (48%) relied on the OTAs to sell a third or more of their room nights and 20% more than half, with smaller hotels the most reliant.
EC to ensure Booking ‘fully complies’ with DMA
The European Commission confirmed Booking.com as a ‘gatekeeper’ under the Digital Markets Act (DMA) in May.
Parent Booking has six months to comply with the DMA and to report on its compliance.
The Commission can impose fines of up to 10% of worldwide turnover for non-compliance, and up to 20% in case of repeated infringements as well as additional remedies such as obliging a gatekeeper to sell a business or parts of it.
Margrethe Vestager, EC executive vice-president in charge of competition policy said: “Holidaymakers will start benefiting from more choice and hotels will have more business opportunities following our decision.”
Commissioner for the internal market Thierry Breton added: “Booking is an important player in the European tourism ecosystem. We will work to make sure it fully complies with the DMA.”
The DMA came into force on March 7 and the EC launched major investigations into Google parent Alphabet and fellow ‘gatekeeper’ platforms Apple and Meta over non-compliance the same month.
Google is the subject of two investigations, one into whether its search results – including Google Flights and Google Hotels – preference its own services over rivals.