It’s not just U.S. hotels that are striking back against online travel agents (OTAs) like Expedia and Priceline.
European hotels and other travel companies recently aired their complaints to the U.K. Parliament in a nearly 900-page report titled “Online Platforms and the Single Digital Market” about what they perceive as unfair practices by OTAs, especially in regards to room pricing and search tools.
European hotels and other travel companies recently aired their complaints to the U.K. Parliament in a nearly 900-page report titled “Online Platforms and the Single Digital Market” about what they perceive as unfair practices by OTAs, especially in regards to room pricing and search tools.
The purpose of the report was to open up a discussion about whether or not the “current regulatory environment” in Europe is fit to handle the fast-growing and extremely powerful presence of online businesses, which includes the travel booking market. (The report decided that the current regulatory environment is enough, but there should be some added oversight in a few areas.)
One major hotel chain, which anonymously aired its grievance in the report, complained that OTA price parity clauses often hurt a hotel’s business because these clauses require hotels to list their lowest prices with the OTAs. The same rate is also listed on the hotel’s website but because of the OTAs’ powerful search tools and high-ranking internet presence, hotels fear travelers may book through OTAs instead of directly with the hotel.
A rep from the British Hospitality Association elaborated further on the financial hurt done by price parity clauses, saying, “hotels cannot offer a lower price direct to the consumer, even though when selling direct they don’t have to pay a significant commission to the OTA.”
A rep from the British Hospitality Association elaborated further on the financial hurt done by price parity clauses, saying, “hotels cannot offer a lower price direct to the consumer, even though when selling direct they don’t have to pay a significant commission to the OTA.”
The restriction of price parity clauses is a common gripe that hotels have with OTAs which is why big chains like Hilton, Marriott, and Hyatt Hotels in the United States have begun offering direct booking discounts to their loyalty program members. The dominance of OTAs is also why the American Hotel and Lodging Association vehemently protested the merger of Expedia and Orbitz last summer saying the joined companies would “severely reduce consumer choice in the online marketplace.” (Their protests were to no avail—the U.S. Department of Justice approved the merger.)
So what does all this behind-the-scenes tussling mean for consumers looking to book their next trip? Better deals.
With OTAs and hotels competing against each other for business, consumers who comparison shop are more likely to find prices in their budget range. On the OTA sites, consumers can be assured they are seeing the lowest rates, while on the hotel’s website, they will find not just the lowest rate but may also be lured with added perks like free WiFi, extra loyalty program points, or discounts at the hotel bar or restaurant.
With OTAs and hotels competing against each other for business, consumers who comparison shop are more likely to find prices in their budget range. On the OTA sites, consumers can be assured they are seeing the lowest rates, while on the hotel’s website, they will find not just the lowest rate but may also be lured with added perks like free WiFi, extra loyalty program points, or discounts at the hotel bar or restaurant.
As the fight between OTAs and hotels and other travel companies heats up, consumers should definitely take advantage of the power struggle while it’s still going on.
