European hoteliers voice concerns over reliance on major online travel agencies, citing unfair practices.
- A Hotrec report highlights the dependency of hotels on OTAs while accusing them of monopolistic tendencies.
- The European Commission’s designation of Booking.com as a ‘gatekeeper’ under the Digital Markets Act is welcomed by hoteliers.
- Hoteliers report significant challenges, such as price undercutting and withholding guest data by OTAs.
- Smaller hotels feel the biggest impact due to their dependence on third-party platforms for bookings.
The European hospitality sector has raised alarms over its increasing reliance on major online travel agencies (OTAs). According to Hotrec, a leading association representing European hotels, these platforms often engage in unfair business practices. A substantial number of hotels have reported that they are being undercut by OTAs, whose marketing budgets allow them to offer lower prices without the consent of the hoteliers themselves. This practice not only puts financial strain on the hotels but also damages their operational integrity and reputation.
The European Commission’s recent classification of Booking.com as a ‘gatekeeper’ under the Digital Markets Act (DMA) is a critical step towards addressing these issues. This legislation aims to ensure fair competition within digital markets by imposing certain obligations on key players. Hoteliers have welcomed this move, believing it will provide a more level playing field. Hotrec’s director general, Marie Audren, has openly criticised Booking.com for withholding crucial guest data and obstructing hotels from offering better prices on their direct channels.
A recent Hotel Distribution Study, which surveyed over 3,000 hotels across several European nations, including France, Germany, and Spain, found that direct bookings have declined significantly, while reliance on OTAs has increased. In 2023, only 51% of bookings were made directly with hotels, compared to 58% in 2013. Booking.com and Expedia together dominate the market, controlling a staggering 85% of OTA bookings, dictating terms and pricing much to the consternation of the hotel industry.
Concerns are mounting over the transparency of OTA practices, particularly regarding commissions and unauthorised promotions. Reports indicate that over 43% of hotels have been undercut by OTAs, with smaller hotels being the most vulnerable. Furthermore, the process of managing bookings and customer interactions through multiple OTA platforms has proven to be cumbersome, leading to numerous operational challenges.
Despite these issues, hotels continue to rely heavily on OTAs to fill their room nights. Almost half of them depend on these platforms to sell a third or more of their rooms, with smaller hotels being particularly reliant. This reliance underscores the substantial market power leveraged by OTAs in the hotel industry, complicating efforts to renegotiate terms or improve conditions independantly.
The ongoing issues between European hoteliers and online travel agencies highlight the urgent need for regulatory intervention to safeguard fair market practices.
